EUR/USD – Euro US Dollar

Last week the European currency showed a slight growth to a high of 1.0272. Reason behind this was the most banal corrective rebound of EUR/USD breaking the equality level of 1.0000, the bottom at 0.9951 on 14th of July, the resumption of Russian gas supplies to Europe and the most important expectation of a rise in the euro interest rate of 50bp. This happened in reality for the first time in past 13 years.

The explanation given by ECB of the rate normalization was, obvious and consists of an updated assessment of inflation growth and the announcement from ECB for the launch of a new instrument which is the TPI.

There will be a meeting of FOMC on July 27th. Most probably the interest rate will be increased, how much ? the idea is by 100bp which hasn’t happened in almost past more then 30 years, or maybe 75bp. If FOMC increases it by 100bp, the rate will reach 2.75%, and the result will be a new assault on the 1.0000 horizon by the EURUSD pair.

The most important event for this week will be FOMC meeting of the US fed reserve and its decision on the interest rate. The volume of the US orders for capital goods and durable goods will become known on the same day, which is 27th July. Consumer data markets in Germany and in Europe will arrive the next day which is 28th July and also 29th July. The preliminary size of the US GDP will be known on 28th of July, and the GDP of Germany and Europe will be on 29th July.