This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
EUR/USD has been trading within a tight range today. Brussels announced a rise in the manufacturing purchasing managers index (PMI) to 51.4 in August, slightly exceeding economists’ expectations of 51.3. Any reading above 50.0 indicates an expansion in the sector. The most recent gross domestic product figures from the eurozone tell us that the region is growing at a modest rate.
On Thursday, the European Central Bank will make its interest rate announcement, and analysts are expecting the rate to remain unchanged at 0.5%. However, dealers will be interested to hear what Mario Draghi has to say about the eurozone.
We are not expecting any more economic updates from the eurozone today, and nor do we have any economic indicators due from the US, as it is a public holiday there. Market volatility and volumes are low, as most US dealers are absent.
The most important announcement of the week is the US unemployment data on Friday. The Federal Reserve has tied its bond-buying scheme to the unemployment rate, so if the jobless rate drops we may see the euro fall versus the dollar.