The euro was stable against the dollar on Friday and is expected to remain so for the next few days. The American producer prices on Thursday did not change the picture. Much depends on what is expected from the Federal Reserve. The current rate reflects an interest rate increase in the United States in 2023. If that expectation shifts to 2022, the dollar can go up and gold can go down. These expectations can also be seen in the US long-term interest rate, which now stands at 1.36 and comes from 1.17 on 2 August.
The euro recently recorded at its lowest point of 2021 at $ 1.1704. Technically, this level could be tested in the short term. Moreover, we do not expect a sharp decline in the euro against the dollar, although the market is still thin and results may be slightly more robust than outside the holiday period.
Next week, attention will be paid to the interest rate decision of the Central Bank of New Zealand. That may be the first Central bank of the major currencies to raise its policy interest rates, and this may be the case as early as next week. Investors also take into account two further interest rate increases of 25 basis points later in the year. This outlook is positive for the New Zealand dollar. We believe that the currency will continue to do well in the coming months.
Next week, investors will be paying attention to important US figures, such as retail sales and Fed minutes. For Europe, investors focus on growth and inflation rates.
Today, France confirmed a declining inflation rate in July. Furthermore, exports from the euro area increased by 23.8% in June and imports increased by 28.2%.
For this afternoon in the United States, import prices for July and preliminary consumer confidence for August as measured by the University of Michigan are on the agenda.
On Friday, the euro rose by 0.1 percent at $ 1.1742. The European currency recorded 0.1% higher at £ 0.8505. The British pound fell 0.1 percent on Friday and stood at 1.3806 dollars. The New Zealand dollar was 0.1 percent higher at 0.7003 US dollars.