- Prior was 1.0%
yy WDA 2.4% vs 3.7% exp vs 4.8% prev revised down from 5.0%
While USD weakness is obviously a big part of the story, the Euro has been the best performing major currency during the run-up of the last two weeks.
Having raised our forecast for EUR/USD at end-Q3 to 1.17 from 1.12 just a month ago, we aren’t inclined to lift it further at this stage.
Yet we have to acknowledging the risk we could well print above 1.20 in the coming few weeks, in particular if the USD takes another leg lower (encompassing a clean break of the 92.0 DXY level). The 50% retracement level of the aforementioned move down comes in at 1.2167.
That said, we continue to look for a USD correction into year-end to bring EUR/USD at least modestly lower (current forecast is 1.15), pending a bigger up-move in 2018. In this respect note that aggregate net speculative IMM futures positioning is now close to historical extremes
On Wednesday, EUR/USD printed a doji pattern on a daily chart to signal exhaustion following a roughly 200 pip decline from last week’s high. The pair held above support from the 2015 high at 17.14 on a 4-hour chart.
The year-on-year growth rate increased to 2.2% from 1.9% the previous quarter and was slightly above the 2.1% reported in the preliminary data.
yy 3.4% vs 2.7% prev revised up from 2.6%