Τhe single European currency has stabilized slightly above the 1.11 level after yesterday’s mild correction as signs of fatigue were clearly on the table.
Μixed macroeconomic data from both sides of the Atlantic did not allow for significant market volatility while at the same time acting as a weight on the continued upward movement of the European currency.
Surveys for the performance of the services and manufacturing sectors in Eurozone and US were announced close to estimates without causing much concern but keeping fears on the table about the growth rate.
Last month’s disappointing US jobs data acted as a trigger to increase speculation against the US dollar, as several investors bet on a more than 25 basis point rate cut in September.
For now bets remain relatively unchanged with the possibility of a 25 basis point rates cut currently being the baseline scenario.
Fed Chairman Jerome Powell’s speech at Jackson Hοle certainly stands out on today’s agenda as investors eagerly await possible fresh messages for Fed’s September meeting.
The European currency’s rise of the past 2 weeks seems to have lost its momentum confirming the thought that signs of fatigue will soon appear on the table.
I will maintain this thought and the strategy of potentially buying the US currency near 1,12 level as during yesterday although the exchange rate approached this level I failed to find the correct entry point.
