Yesterday, Germany’s October ZEW Economic Sentiment Index was announced at 13.1, higher than the expected 10.0, which caused the euro to rise. However, since U.S. long-term interest rates had already been falling before the announcement, the euro’s rise was limited, staying around the lower 1.09 range. The ZEW report increased expectations due to possible interest rate cuts by the European Central Bank (ECB) and China’s economic stimulus measures.
Later, as the U.S. dollar gained strength in the New York market, the euro dropped further to 1.0882, continuing its decline.
At tomorrow’s ECB meeting, a 0.25% interest rate cut is expected, but the market has already factored this in. Despite possible buying back of the euro before the meeting, the euro is likely to continue its downward trend due to Europe’s weak economy compared to the strong U.S. economy.
EUR/USD Forecast Range: 1.0910 – 1.0835 (61.8%, BB lower limit)
Note: The information above does not guarantee profits. Please make your own decisions when trading.