Weekly Forex Analysis: Strong Euro despite a looser macro

Weekly Forex Analysis: Strong Euro DESPITE a looser macro

Analysis Department of Bankinter offers its forecasts for the next behavior currencies:

Eurodollar (€ / USD)

The euro remained strong despite the decline in the ZEW and PMI Manufacturing Manufacturing.

This week, we consider it unlikely that the dollar recovers ground despite the upward revision of US GDP growth in the fourth quarter 2017 . The consumption deflator (+ 1.7% est.) Should confirm that inflationary pressures are moderate and the Fed can keep your roadmap 2 additional increases in 2018, which will keep the euro supported. 

Estimated range (week): 1,227 / 1,241. 

Euroyen (€ / JPY)

The yen acted as a safe haven for fear of reprisals from China to new US tariffs its imports. The volatility rebounded (VIX index went to 25 from 16) and the yen hit its highest level since September 2017 (128.9).

This week, the macro will be good but stay on 2nd plane (+ 2.3% Industrial Production and Retail Sales estimated + 1.7% estimated) and the direction of the yen will depend on the flow of noticas on the possible trade war . If the tension is released, the JPY should correct but increases could be seen more.  

Estimated range (week): 129.5 / 130.2.

Eurolibra (€ / GBP)

Sterling strengthened last week thanks to the agreement in principle on the text which will govern the transitional period Brexit .

This week the macro will have little impact on UK and EMU will be rather weak. We anticipate lateral behavior at the junction

Estimated range (week): 0.875 / 0.891.

Eurosuizo (€ / CHF)

Moving back and forth at the junction last week.

In the coming days , a climate of greater uncertainty should promote the role as a safe haven currency Swiss . This will also contribute to a slightly weaker in EMU macro. 

Estimated range (week): 1,165 / 1,178. 

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