EUR/USD Weekly Forecast - 23 April

Saturday, Apr 21 2018

EUR/USD initially stuck to the range but eventually began cracking. More worrying signs from Europe and further upbeat figures in the US weighed. Euro-zone inflation was downgraded to 1.3% in March and Germany’s ZEW indicator plunged to negative territory. Both negative indicators had only a temporary effect on the common currency.

In the US, building permits beat predictions with and Fed officials continued expressing confidence about the economy. Late in the week, US 10-year bond yields began climbing, topping 2.90%. The greenback followed them and advanced across the board.

Major events in the coming week:

Flash PMI data: Monday morning: 7:00 for France, 7:30 for Germany, and 8:00 for the whole euro-zone. Markit’s indices have been reflecting a slowdown in the euro-zone. While numbers remain above the 50-point threshold that separates expansion from contraction, they are expected to slide slightly in both manufacturing PMI and service PMI across in all the zones.
German Ifo Business Climate: Tuesday, 8:00.
Belgian NBB Business Climate: Tuesday, 13:00.
German GfK Consumer Climate: Thursday, 6:00. Contrary to German businesses, German consumers remain upbeat. The score is expected to remain at the same level as previous month.
Spanish Unemployment Rate: Thursday, 7:00. Spain still suffers from a high unemployment rate that reached 16.6% in Q4 2017. A slide is likely in Q1 2018- 16.2% is forecast.
Rate decision: Thursday, decision at 11:45, press conference at 12:30. Since March ECB meeting, the economic data has somewhat deteriorated. At this April meeting, the ECB is unlikely to change its interest rates. However, the press conference by Draghi will surely move the euro.
French GDP: Friday, 5:30. The growth rate is expected to drop from 0.7% q/q to 0.4%.
German import prices: Friday, 6:00.
French CPI (preliminary): CPI rose by 1% in March. A modest rise of 0.1% is expected.
French Consumer Spending: Friday, 6:45.
Spanish CPI (preliminary): Friday, 7:00. Inflation expected to stay at March levels of 1.2%.
Spanish GDP: Friday. The 0.7% growth rate in Q4 was relatively slow and is expected now.
German Unemployment Change: Friday, 7:55. In February, 19K people dropped off the lists of the unemployed. A slightly smaller slide of 15K is on the cards for March.