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The euro did not weaken in its reaction movement in the face of the dollar, not due to a revival of appetite for the risk, but for fear of an upcoming entry into recession of the United States. This possible inflection point of asymptote type on the health of the first economy in the world has been materialized for more than a month, by cascade disappointments on major indicators (U-Mich of households, retail sales, employment report in particular).
It is in this sensitive context, against the background of the temperature of the VIX index, that the trades will read this Wednesday of consumer prices in the United States for the month of February, the famous ICC (Consumer Price Index). They are expected up 0.3% monthly, excluding food and energy.
“It is absolutely necessary good news, especially after the surprise increase of 0.4% over a month in January production prices,” alerts Christopher Dembik, investment strategy advisor at Pictet AM. “In terms of consumer prices, it is necessary to expect the price of eggs, which is at a historic record due to avian flu, continues to lead statistics. In the process, the monetary market could still adjust its rates decrease forecasts by the federal reserve. Two weeks ago, a single drop in rate was anticipated this year. term.”
Bover has their eyes riveted on the latest developments in the trade war that rages in North America. Donald Trump announced an increase in customs duties on Canadian steel and aluminum applicable on Wednesday, to bring them from to 50%, compared to 25% previously. Bad news never arriving alone, Donald Trump also promised to “considerably increase” customs surcharges on Canadian cars from April 2, “if Canada does not give up other incredible and long -standing customs duties”.
The President is going back to blow, since the Canadian province of Ontario decided on Monday to apply customs duties of 25% to the export of electricity to the United States. This customs surcharge will be maintained, “until the American customs duties are eliminated once and for all,” the government said in a statement quoted by Radio Canada.
The trade war is not confined to the North American continent, naturally and “in terms of monetary policy, the readability is suddenly reduced because of the trade war. We plan that the ECB will continue to lower its rates until June, with a terminal rate around 1.85 %”, according to Christopher Dembik.
At midday on the foreign exchange market, the euro was treated against $ 1,0910 approximately.
Key graphics elements
The crossing in significant volatility of $ 1,0608 changes the situation on the configuration of the currency pair, which has just validated a resumption of support on a long mobile average, at 50 days (in orange), which begins a resource figure. The scenario of a fast melting towards the perfect parity (€ 1 = $ 1) is invalidated.
Medium term
In view of the key graphic factors that we have mentioned, our opinion is neutral in the medium term on Euro dollar parity (Eurusd).
We will keep this neutral opinion as long as the EURO Dollar parity prices (EURUSD) are positioned between the support at 1,0758 USD and the resistance to USD 1,1012.
The News Bulletin 247 Council
Daily data graphics
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