The Euro set to rise against dollar

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On Friday, July 27, the dollar ended in the red. He fell across the market, losing all positions earned in the European session. Sales followed the publication of data on U.S. GDP for the second quarter. The data coincided with the forecast, so buyers began to close long positions on the dollar before the weekend. I believe that after the strong report, the fed will continue to gradually raise rates to prevent overheating of the economy.
According to published us statistics, preliminary index of the U.S. GDP for the second quarter of 2018 4.1% (consensus: 4.1% and previous reading of 2.2%). The final index value of consumer sentiment University of Michigan in the United States in July amounted to 97,9 (the forecast was of 97.1, the preliminary value of 97.1).
By results of the week almost all major currencies showed a decline. The largest decline against the greenback showed Euro (-0,56%). Behind him is the new Zealand dollar (-0,24%), Australian dollar (-0,22%), Swiss franc (-0,15%) and British pound (-0,15%). Showed the strengthening of the canadian dollar (+0,65%) and Japanese yen (+0,41%).
Today, watching the dynamics of yield of us bonds. There are risks that it will fall from 2.96% to 2.94%, which will cause the weakening US dollar and strengthening Euro. The crosses on the Euro all traded in the black, therefore, the decrease of yield US10Y Euro is able to rise against the dollar to the upper limit of the corridor – 1,1755.
Key events this week are: the index of business activity of China, the Eurozone, UK and US, interest rate decision Bank of Japan, US Federal reserve and the Bank of England and the state of the labor market (NFP) in the US in July. All the news listed below do not have a strong impact on the currency market.
10:00 Switzerland will release its leading economic indicators index KOF in July. The indicator has no effect on the market.
At 10:30 Britain will publish data on changes in the volume of net lending to individuals, consumer credit and the number of approved applications for mortgage loan in June. This unit does not seem to impact on the market, so ignore it.
12:00 EU will publish the index of consumer confidence, business confidence in industry sentiment index in the economy, and the index of mood in business circles in July. Market participants are unlikely to pay attention to them. If only all of any drivers for the movement will not, it can have an impact on the Euro.
At 15:00 Germany will present consumer price index for July. The only factor that can affect the dynamics of pair Euro/dollar.
At 17:00 the U.S. will report the volume change pending home sales for June.
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Vladislav Antonov,
Analyst
Alpari