The euro had an unusual day today against the US dollar as it had a two-cent swing within 2 hours in the middle of the day. Short-term downside risk has become unlikely against the dollar given the re-forecasts from the Federal Reserve to hold off raising interest rates by a few months. The downside risk still remains in the long term as the uncertainty surrounding the economy is becoming a greater concern following Germany’s decline across the board against several indicators.
The next big piece of data for the Eurozone is inflation data which is out today. This has been forecast to remain at 0.3% throughout September. If the figure is weaker than expected, it would increase the pressure on the European Central Bank (ECB) to have to use methods to stimulate the economy i.e. quantitative easing – something the ECB has not implemented formally thus far.