Major Events That Will Affect The EUR/USD Pair This Week

By (Dublin) – European Central Bank President Mario Draghi, saved the pair from deteriorating with bold statement about the Central bank’s intervention. His statement will be supported this week as the ECB makes rate decision. Here is a look at some of the events that are expected to shape EUR/USD sentiments.

On Monday at 0700hrs, the Spanish GDP data will be released. With Spain becoming the center of attention as the debt crisis in Europe continues to escalate, investors and analysts will be looking at this report for indications of any growth or future trend in various sectors. Spain is officially in recession already after its GDP contracted for two consecutive quarters by 0.3 percent each time. In this report, another decline of 0.3 percent is expected. The Retail PMI will be released at 0800hrs on Monday where a figure below 50 is expected. The previous reading was at 48.3, which was better than previous readings. The Italian bond auction will also be conducted on the same day, where yields below 6 percent for the 10-year benchmark bonds are expected.

On Tuesday, the German Retail Sales report will be released at 0600hrs, with an increase of 0.6 percent expected. There was a slight drop in Europe’s locomotive volume as it dropped by 0.3 percent. Investors will be looking for any signs of contagion to Germany despite the positive situation in the Eurozone’s largest economy. At 0645hrs, the French Consumer Spending report will be released. Consumer spending in France rose for the last two months and the market expects another rise of 0.2 percent. The German Unemployment Change figure will be released at 0755hrs GMT, where a rise to 8,000 is expected; five minutes later at 0800hrs the Italian Unemployment rate will be announced. The market expects the rate to increase to 10.2 percent from 10.1 percent. An hour later at 0900hrs, the euro-zone CPI Flash Estimate and Unemployment Rate will be released. The market expects the CPI to remain higher than the ECB estimate of 2 percent at 2.4 percent. In addition, the market expects the unemployment rate to increase from its previous reading of 11.1 percent.

On Wednesday, the Spanish and Italian Manufacturing PMI will be released at 0715hrs and 0745hrs respectively with figures expected to show declines. The Final Manufacturing PMI will be released at 0800hrs. The market expects no change from the previous reading of 44.1 points. The Spanish Unemployment Change, Euro Zone PPI and Rate Decision will be released on Thursday at 0700hrs, 0900hrs and 1145hrs respectively. Unemployment in Spain is expected to drop as a result of booming tourism sector. The euro zone PPI is expected to drop by 0.3 percent while the rate decision and the press conference thereafter will have major effects on the EUR/USD cross.

The Final Services PMI and Retail Sales for the euro zone will be announced on Friday at 0800hrs and 0900hrs respectively.

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