EUR/USD Weekly Forecast - 16 April

Sunday, Apr 15 2018

EUR/USD remained range-bound once again trading almost exclusively in a narrow range. Final inflation data a German survey stand out. More signs of euro-zone weakness emerged with industrial output falling by 0.8%. The ECB reiterated that the change in wording seen in the last statement was not significant: a removal of stimulus is not getting closer. This came after ECB member Nowotny said that QE will end this year only to have his comments disowned by the wider Bank.

In the US, inflation came out as expected but the higher read is a reason to be cheerful for the Federal Reserve according to the FOMC Meeting Minutes, that expressed confidence about the economy and reaching the 2% inflation target. Worries about Syria turned into an airstrike by the US, the UK, and France over the weekend. The concerns were not really felt in EUR/USD.

Major events in the coming week:

German WPI: Monday, 6:00. The Wholesale Price Index dropped by 0.3% in February, implying weaker consumer inflation in the pipeline. It is expected to show a rise of 0.4% for March.
German ZEW Economic Sentiment: Tuesday, 9:00. The ZEW institute releases its survey early in the month. After a significant fall to 5.1 points in April, an outright negative figure is projected for April: -0.8 points. The all-European figure is forecast to slide from 13.4 to 7.3 points.
Final CPI: Wednesday, 9:00. The initial sluggish numbers for March- headline inflation at 1.4% and core inflation at 1%- will likely be confirmed and hold back the ECB from withdrawing QE.
Current Account: Thursday, 8:00. After a whopping level of 37.6 billion in January, a squeeze to 32.3 billion is on the cards.
German PPI: Friday, 6:00. The Producer Price Index dropped by 0.1% in February, similar to the WPI. A bounce of 0.2% is on the cards.
Jens Weidmann talks: Friday, 11:30. The President of the German central bank, the Bundesbank, speaks in Washington and will likely provide his hawkish views about the economy and the need to remove monetary stimulus.
Consumer Confidence: Friday, 14:00. After many months in deep negativity, the consumer confidence score finally reached a balance at 0. A repeat of the very round score is expected.