Mr Fisher is established as a longtime opponent of quantitative easing, and his remarks that the US Federal Reserve should dial back quantitative easing sooner rather than later, owing to the decrease in US unemployment, had a short-lived effect on the EUR/USD currency pair.
This morning’s Italian industrial production was slightly softer than expected, with statistics showing that it rose 0.3% from May, lower than the 0.4% expected. Italy’s GDP fell by 0.2% in the second quarter of 2013, and while better than the 0.6% decline in Q1, eight consecutive quarterly declines mean that the recession is now the longest on record.
The forex market is clinging to the positive from this turn of events and the euro has succeeded in pushing through $1.3250 level – we may yet see an attempt at $1.33. The downtrend line from the February highs may be resistant to such a move, with little action above the $1.3320 level since mid-June. With the 200-week moving average residing at the $1.34 level and key support coming in at $1.3150, we may remain range-bound until a new catalyst materialises.