The EUR/USD pair witnessed calm trading Monday on lack of data that pushed the pair higher just to be influenced by inflation reports from the euro-zone that showed that prices accelerated to the fastest pace in two-year, accordingly, trimming gains and pulling the pair back to trade near the opening levels.
A bearish trend is expected Tuesday where inflation threats may place huge pressure on the ECB to hike rates, where expectations signal that inflation will average 2.3% this year, above the desired rate of the ECB, accordingly, pushing the euro to fall against the dollar.
The ECB will announce its decision on rate Thursday at 11:45, with expectations showing that the bank may hike rates by 25 basis points.
Tuesday’s influential news on the pair will consist of the services sector’s performance in Germany, the Euro Zone and UK where the German and EZ PMI service (released at 07:55 GMT and 08:00 GMT respectively) is expected to show further expansion in the final reading for March, though lower than the advanced estimate.
As for UK’s PMI Services index (released at 08:30 GMT) it is expected to remain unchanged in March. Weak data from Europe is usually reflected by weak performance for the pair causing depreciation.
Meanwhile, the pair will witness volatility and further bearishness is expected by 18:00 GMT when the Federal Reserve releases the Minutes report for the last rate meeting, which may reveal any plans to be laid by the Fed in regards of $600.0 billion stimulus plan that is scheduled to purchase Treasuries until June.
Originally posted here
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