EUR/USD has posted gains in the Thursday session, bouncing back from the losses seen on Wednesday. Currently, the pair is trading at 1.1394, up 0.37% on the day. There are only a handful of eurozone events this week, with no data indicators on Thursday. The U.S. releases employment claims, which is expected to rise to 217 thousand. We’ll also get a look at CB Consumer Confidence, which is forecast to climb to 135.7 points. On Friday, Germany releases Preliminary CPI and the U.S. publishes Chicago PMI and Pending Home Sales.
The turmoil in European and the U.S. equity markets has continued this week, but the euro has remained largely unaffected, showing little net movement this week. The catalyst for the volatility in the markets was the Federal Reserve’s rate statement last week, which received a thumbs-down from investors for being more hawkish than expected. Fed policymakers indicated that the current stance of gradual and incremental rate hikes would continue in 2019, although the Fed dot plot lowered the rate forecast from three rate hikes to two rate hikes.
Investor risk appetite has improved, following reports that a U.S. delegation would travel to China to hold trade talks in the first week of January. The ongoing trade dispute between the world’s two largest economies has caused havoc in the equity markets and boosted the U.S dollar against its rivals. President Trump has agreed to suspend further tariffs on China while the sides are talking. A breakthrough might be to tall an order, but the fact that the sides are meeting face-to-face for the first time in months will likely improve the mood of jittery investors.
