oanda_logo
  • Sign in
  • Open an account

Sign in

Select account:

  • Currency converter
    • Converter
    • Tools
    • Mobile
    • Live rates
    • Historical rates
    • Embed converter
    • Help
  • FX Data Services
    • FX Data Services overview
    • Exchange Rates API
    • Corporate FX transfers
    • Historical currency converter
    • Contact us
    • Blog
  • OANDA Group
    • About OANDA
    • Media centre
    • Careers
Logotype
The Beat of the Global Markets
  • Home
  • News Events
    • Brexit
    • COVID-19
    • Earnings season
    • Non-farm payrolls
    • Trade war
    • US election
  • Markets
    • FX
    • Indices
    • Commodities
    • Crypto
  • Multimedia
    • Podcasts
    • Videos
  • Economic calendar
  • Analysts
Home/FX/Newsfeed

EUR/USD – Euro Slips Below 1.05 as Fed Raises Rates

December 15, 2016 Share Print 0

The euro has steadied on Thursday, following sharp losses in the Wednesday session. Currently, EUR/USD is trading at 1.0470, its lowest level since March 2015. On the release front, German and Eurozone Manufacturing PMIs both beat their estimates and pointed to continuing expansion. In the US, it’s a very busy day with a host of releases. Today’s highlights are CPI reports, unemployment claims and the Philly Fed Manufacturing Index. On Friday, the Eurozone will release Final CPI, while the US publishes Building Permits.

The Federal Reserve’s rate hike was widely expected and priced in by the markets at close to 100%. Still, once the rate hike was announced, EUR/USD dropped 1 percent. The rate hike was historic, marking the first rise since December 2015 and only the second rate hike since 2008. In its rate statement, the Fed sounded positive about the economy, noting that the “labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year“. As well, the Fed revised upwards its forecast of US economic growth to 1.9% in 2016 and 2.1% in 2017, slightly higher than the Fed’s September estimates. What’s next for the Fed? In September, Fed officials said they expected two rate hikes in 2017, but the Fed is now projecting three or even four hikes next year. However, projections can change based on economic conditions, and the wild card of Donald Trump could also play a critical role in monetary policy. Trump’s economic platform remains sketchy, apart from declarations that he will increase government spending and cut taxes. If Trump’s economic policies lead to higher inflation levels, the Fed may have to step in with larger hikes in order to keep the economy form overheating.

EUR/USD Breaks 1.0500 as Fed Connects the Dots

The Eurozone economy has shown improvement in the third quarter, as inflation and growth numbers have moved higher. Confidence levels among investors and analysts remain strong, as underscored by ZEW Economic Sentiment reports in December. The German indicator remained at 13.8 points, although this was short of the forecast of 14.2. The Eurozone report jumped to 18.1, beating the estimate of 16.5. These figures point to optimism over growth aspects in the Eurozone and in Germany, the bloc’s number one economy. On Friday, the Eurozone releases Final CPI, which is expected to improve to 0.6%.

EUR/USD Fundamentals

Thursday (December 15)

  • 8:00 French Flash Manufacturing PMI. Estimate 51.9. Actual 53.5
  • 8:00 French Flash Services PMI. Estimate 51.8. Actual 52.6
  • 8:30 German Flash Manufacturing PMI. Estimate 54.6. Actual 55.5
  • 8:30 German Flash Services PMI. Estimate 55.0. Actual 53.8
  • 9:00 Eurozone Flash Manufacturing PMI. Estimate 53.9. Actual 54.9
  • 9:00 Eurozone Flash Services PMI. Estimate 53.9. Actual 53.1
  • Tentative – Eurozone Long Term Refinancing Operation
  • 13:30 US CPI. Estimate 0.2%
  • 13:30 US Core CPI. Estimate 0.2%
  • 13:30 US Philly Fed Manufacturing Index. Estimate 9.1
  • 13:30 US Unemployment Claims
  • 13:30 US Current Account. Estimate -111B
  • 13:30 US Empire State Manufacturing Index. Estimate 3.2
  • 14:45 US Flash Manufacturing PMI. Estimate 54.2
  • 15:00 US NAHB Housing Market Index. Estimate 63 points
  • 15:30 US Natural Gas Storage. Estimate -126B
  • 21:00 US TIC Long-Term Purchases

Upcoming Key Events

Friday (December 16)

  • 10:00 Eurozone Final CPI. Estimate 0.6%
  • 13:30 US Building Permits. Estimate 1.24M 
  • 13:30 US Housing Starts. Estimate 1.23M

*All release times are GMT

* Key events are in bold

EUR/USD for Thursday, December 15, 2016

EUR/USD December 15 at 10:55 GMT

Open: 1.0511 High: 1.0523 Low: 1.0467 Close: 1.0474

EUR/USD Technical

S1 S2 S1 R1 R2 R3
1.0170 1.0287 1.0414 1.0506 1.0616 1.0708
  • EUR/USD broke below two support lines on Wednesday following sharp losses. The pair is steady on Thursday
  • 1.0414 is providing support
  • 1.0506 is a weak resistance line

Further levels in both directions:

  • Below: 1.0414, 1.0287 and 1.0170
  • Above: 1.0506, 1.0616 and 1.0708
  • Current range: 1.0414 to 1.0506

OANDA’s Open Positions Ratio

EUR/USD ratio is almost unchanged in the Thursday session. Currently, long positions have a majority (60%), indicative of trader bias towards EUR/USD reversing directions and moving upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

  • Bio
  • Google+
  • Latest Posts
Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.
Kenny Fisher

+Kenny Fisher

Kenny Fisher

Latest posts by Kenny Fisher (see all)

  • Canada’s GDP shrinks, but loonie steady - 03/02/2021
  • Euro dips to 4-week low - 03/02/2021
  • RBA stays on the sidelines - 03/02/2021
EUR, EUR/USD, Eurozone Final CPI, Eurozone Flash Manufacturing PMI, Eurozone Flash Services PMI, Eurozone Long Term Refinancing Operation, French Flash Manufacturing PMI, French Flash Services PMI, FX, German Flash Manufacturing PMI, German Flash Services PMI, US Building Permits, US Core CPI, US CPI, US Current Account, US Empire State Manufacturing Index, US Flash Manufacturing PMI, US NAHB Housing Market Index, US Natural Gas Storage, US Philly Fed Manufacturing Index, US TIC Long-Term Purchases, US Unemployment Claims, usd
Back to Top
Subscribe
Subscribe form
Week ahead
Week Ahead – Rising yields spook markets
Posted by Craig Erlam Feb 26, 2021
FX
Canada’s GDP shrinks, but loonie steady
Posted by Kenny Fisher Posted 3 hours ago
Euro dips to 4-week low
Posted by Kenny Fisher Posted 4 hours ago
RBA stays on the sidelines
Posted by Kenny Fisher Posted 8 hours ago
Indices
Mixed session for stocks, Target crushes earnings
Posted by Ed Moya Posted 2 hours ago
Asian equities move modestly higher
Posted by Jeffrey Halley Posted 11 hours ago
Asian equities start week with gains
Posted by Jeffrey Halley Mar 1, 2021
Commodities
Oil steady ahead of OPEC+ meeting, gold hanging around
Posted by Ed Moya Posted 3 hours ago
Oil eyes OPEC, gold attempts rebound
Posted by Sophie Griffiths Posted 7 hours ago
Oil and gold slide, US dollar rises
Posted by Jeffrey Halley Posted 10 hours ago
Crypto
Bitcoin mania returns
Posted by Ed Moya Mar 1, 2021
Commodities and Cryptos: Winter Freeze pumps oil, Gold’s d...
Posted by Ed Moya Feb 16, 2021
Commodities and Cryptos: Crude’s upbeat demand outlook, Go...
Posted by Ed Moya Feb 12, 2021
Follow us
  • RSS
  • Facebook
  • Twitter
  • Google

Logotype

MarketPulse provides up-to-the-minute analysis on forex, commodities and indices from around the world.

  • OANDA Group
  • FX Data Services
  • Currency conversion
  • News events
  • Markets
  • Economic calendar
  • About MarketPulse
  • Terms of use
  • Site map
MarketPulse is an award-winning news site that delivers round-the-clock commentary on a wide range of asset classes, as well as in-depth insights into the major economic trends and events that impact the markets. The content produced on this site is for general information purposes only and should not be construed to be advice, invitation, inducement, offer, recommendation or solicitation for investment or disinvestment in any financial instrument. Opinions expressed herein are those of the authors and not necessarily those of OANDA or any of its affiliates, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, please access the RSS feed or contact us at info@marketpulse.com © 2020 OANDA Business Information & Services Inc.