EUR/USD what next ?

hello,

My previous entries regarding EUR/USD where you can find a lot of interesting things. This can be a good introduction to this entry.

<EUR/USD>

The market interest rate does not change much at the end of the week, when it comes to USD:

The rates for the dollar basically consolidating FRA 9×12 or a minimum increase FRA 18×24. For the euro, I see no change in the medium-term contracts FRA 9×12 and FRA 18×24, but on the short end you will see a normalization of the liquidity situation, although it is quite slow (which on the other hand means that there is still potential for revaluation of euro). Monthly LIBOR in euro is now less than 0.2%, although it is still almost 3bps above interest rate for a dollar.

chart 1. EUR/USD & spread FRA EU-US 3x6

chart 2. EUR/USD & spread FRA EU-US 6x9

chart 3. EUR/USD & spread FRA EU-US 9x12

chart 4. EUR/USD & spread FRA EU-US 12x15

chart 5. EUR/USD & spread FRA EU-US 12x18

Importantly, the gap in the charts shown above is still very high and should lead to further falls in EURUSD.

The next week, emotions do not run out

US - all, of course, waiting for the first of the new year Payroll (Friday, 14:30), except that on Monday we will know the ISM service sector, on Tuesday foreign trade figures, on Wednesday - the ADP report and the minutes of the FOMC meeting, on Thursday the traditionally weekly claims.

ECB meeting - it will be the most important event in the euro zone in the next week, we'll see if Draghi on Thursday, the president will address the recent strong changes in the market interest rate, which has translated well on EURUSD

UK - also promises to be an interesting week on the pound - meeting of the Bank of England and the publication of the balance of trade on Thursday, on a Friday we will get data regarding industrial production in the UK

regards,

oscarjp

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