EUR/USD dips back below 1.3700

There are more misses than hits in this morning’s EU manufacturing and service figures, leading EUR/USD to dip back below the 1.3700 level.

The eurozone still has questions hanging over it as to when and what the European Central Bank will decide to do in order to tackle low inflation rate. ECB president Mario Draghi has mentioned on numerous occasions that the bank has a number of options available at its disposal to tackle this issue, but has so far been reluctant to elaborate on what these are. Even without a clear picture on this the currency market appears to be willing to give the ECB the benefit of the doubt; however, this goodwill can only last so long without any further clarity.

On the flipside of the equation, the US has a number of pieces of economic data coming out today that could see sentiment change. Over the afternoon session we will see monthly core CPI data along with the latest US unemployment claims and the Philadelphia Federal Manufacturing Index.

Although markets have headed south since my colleague Chris Beauchamp wrote about the currency cross, I would have to agree that this drift lower still feels like a short-term move and is susceptible to a reversal.  

Spot FX EUR/USD chart

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.

Find articles by analysts

Find out more about