Are the Euro And the USD Going To Diverge This Week?
Skerdian Meta • 1 min read
The euro has been in an uptrend since the beginning of this year. The economic data from this continent has improved considerably during this time and the ECB (European Central Bank) has slowly shifted from extremely dovish to slightly hawkish.
So, the EUR/USD has followed an uptrend as well, climbing from around 1.03 to 1.14 in the last 6 months. Last week, the market expected some clarity from the FED but they wanted to see more evidence from the economic data before giving a verdict.
Well, the economic numbers from the U.S. were better before the FOMC minutes and they continued in the same trend after the minutes were released, so the USD found some bids last week and EUR/USD closed the week unchanged, despite the euro gaining against most majors.
This week, though, things might change. The ECB's Villeroy was out over the weekend chatting to people, saying that there will be no action from the ECB, at least until autumn. This means that nothing will happen at the July meeting.
That might hurt the euro and if the U.S. data keeps this trend, then that might hurt the EUR/USD even more since the fundamentals will diverge.