EUR / USD
Last Friday, the euro continued its decline and dropped by 95 points as of this moment, while the closing of the day showed a decrease of 55 points. News agencies have started to increase pressure on the uncertain timeline of the ECB's quantitative easing program completion due to weak economic indicators. Mario Draghi himself stated the need for constant caution in this regard. On the prospects of the United States, the economy was said to close to overheating and it is more confident to raise rates. Also, the American media suddenly remembered that the Fed had already raised its stake six times and against this background, government bonds began to grow rapidly in yields. Over the last three trading sessions, the yield on 10-year securities increased from 2.82% to 2.96% and rise to the levels of January 2014. As mentioned earlier, information pressure will be an obligatory component in forming the trend to strengthen the dollar and this pressure has begun. Also, Donald Trump's statement (albeit on Twitter) about the artificial increase in oil prices by the OPEC + countries on the decrease of production is also timely. And if oil also starts to be pushed into the price, then the fall of the euro at parity can be considered inevitable. Otherwise, a massive support will not make sense although the US desire to reduce the oil cost but associated with other reasons, primarily geopolitical issues.
Today, macroeconomic data is in favor again to the dollar. The preliminary estimate business activity index in the manufacturing sector (Manufacturing PMI) of the eurozone for April is expected to remain unchanged by 56.6 points. Services PMI is projected to decrease from 54.9 to 54.8. While German Manufacturing PMI is expected to fall from 58.2 to 57.6 and France's manufacturing PMI may fall from 56.9 to 56.6.
In the US, Manufacturing PMI from Markit is expected to fall from 55.6 to 55.2 for the same month, but Services PMI is projected to increase from 54.0 to 54.3. Composite PMI index is expected to increase from 54.2 to 55.3. Home sales in the secondary real estate market for March are expected to increase from 5.54 million to 5.55 million.
We are expecting the decline of the single European currency to 1.2210.
* The presented market analysis is informative and does not constitute a guide to the transaction.
