The Euro is trading above the 1.1050 level in a narrow range, following a day of emotions without major announcements. Despite an initial willingness to continue its recent uptrend and breach the 1.11 level, the Euro’s ease in securing prices above 1.11 raises the potential for a year-end correction.
While the Federal Reserve’s change in rhetoric may be a contributing factor to the Euro’s recent upward momentum, there is a possibility that the movement is influenced by investors liquidating open positions in favor of the US currency before the year-end.
As the year concludes, the last day is anticipated to be relatively calm, with investors likely avoiding significant bets. Today’s focus is on the Spanish inflation price index, providing an early indication of inflationary pressures in the Eurozone for December. The announcement, while stable, slightly below estimates, is unlikely to bring major surprises.
In the US, the Chicago PMI index announcement on economic activity is the only point of interest. The most likely scenario is the exchange rate remaining in a limited range, with a potential surprise if the recent 5-day bull run continues after a pause in yesterday’s afternoon trading.
