The EURUSD exchange rate has seen little strength in a recent bounce and could head lower.
EURUSD – Daily Chart
The EURUSD exchange rate has broken down through the 1.09 level and could reach support around the 1.07 price mark.
The economic data starts with the German IFO business climate index. Analysts expect a reading of 86.7, up from 86.4 last month.
The latest European Central Bank interest rate decision follows that. The ECB will hold rates at the current 4.5%, but the market will be interested in the following press conference. US data will follow in the middle, with durable goods orders expected to show a sharp dip to 1.1%
A US GDP growth figure is also scheduled with an expected 2% reading expected after last month’s 4.9%.
“The US economy really has been diversifying over the last few years and you can see that in a variety of different data, and so for the US economy…. a sort of lacklustre recovery in China has not been a particularly strong channel or effect on the US economy,” she said.
The US Federal Reserve is expected to cut interest rates, but the European Central Bank will follow close behind. Europe’s problem is that it is struggling with growth and heading into recession.
The German GfK consumer confidence number follows on Wednesday, with an expected -24.5, down from -25.1. Later that day, a US inflation number will be released, with an expected 3% reading, down from 3.2%.
A damning poll of more than 1,100 of the ECB’s 5,000-strong workforce found 50.6% rated the performance of Christine Lagarde as “poor” or “very poor” over concerns she is too “political”.
“A woke atmosphere is being created at the ECB, which will prove highly detrimental when people start realising what a dead end this is,” one official who took part in the survey said.
