The US Dollar strengthened amid the publication of favorable Consumer Price Index data for November in the US.
A series of important releases are due today in the eurozone among which Markit Manufacturing PMI, Markit Services PMI for December and Consumer Price Index for November are worth noting. According to the forecasts, the EU economic growth rate remained unchanged in November. Nevertheless, these data might have no effect on the market as traders are waiting for the publication of the Fed’s interest rate decision.
More than 80% of market participants expect a hike in US interest rates; however, these are the Fed’s Monetary Policy Statement and press conference which will determine further dynamics in the EUR/USD pair.
Last Thursday commentaries from the ECB and Fed officials were published that pressured the pair.
The ECB official announced that additional measure including structural reforms are required to stimulate inflation growth in the eurozone. At the same time, the statement from the Fed member was more confident as he insisted that the US economy is ready for higher interest rates due to near-full employment in the economy that would gradually increase inflation to its 2% target.
In addition, the pair was pressured by poor data on Consumer Price Indices for September and Trade Balance for the eurozone.
During the week, pay attention to Markit PMI’s from the eurozone and the ECB monetary policy statement and the press conference and the ECB Interest Rate Decision.