The euro rallied overnight against the U.S. dollar on the back of positive comments by Moody's Investor Services concerning Greece, while the Eurozone final PMI services for the month of September topped expectations.
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Fundamental Headlines
- Bank of Japan Cuts Key Rate - Wall Street Journal
-EU Urges China to Let Currency Appreciate - Wall Street Journal
- Yen Hit as Tokyo Cuts Rates to Almost Zero - Financial Times
-European Services, Manufacturing Cool as Retail Sales Decline - Bloomberg
- Crude Oil Rises on Port Closures, Speculation of Growth in U.S.- Bloomberg
EURUSD: Retail sales in the 16 member euro area unexpectedly fell in August for the first time since April. Figures dropped 0.4 percent after climbing 0.1 percent in July as food, drinks, and tobacco weakened 0.7 percent, while non food products tapered the decline, rising 0.3 percent. Meanwhile, the annual rate rose 0.6 percent, missing expectations of 1.3 percent. Also on the docket during the overnight trade was the final Eurozone PMI services index which topped economist's forecast. At the same time, Moody's Investor Service said that it is impressed with Greece's efforts to reform its finances. In turn, European shares halted its 6 day decline, and lead the euro to continue its northern journey against the U.S. dollar as the exchange rate maintains its ascending channel. Going forward, I will keep a close eye on the pair, and wait for a break below the range before placing a short position as my bias remains to the downside. Despite the optimism building in the bloc, governments will implement tough austerity measures to battle their high budget debts. This will weigh on growth, and cause the single currency to come back under pressure. To discuss this and other reports, please visit the EUR/USD forum.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical's, Weekly Spotlight, and Forex Trading Weekly Forecast
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