A busy day for fundamental news for the euro to dollar pair which is all released against the backdrop of the G20 meetings which continue later today in Pittsburgh, with the first item of news being the M3 money supply figures forecast at 2.7% against a previous of 3.0%. This figure measures the change in the total quantity of domestic currency in circulation and deposited in banks, and if the actual is better than forecast then this is generally good for the home currency, in this case the euro. This is followed by Italian Retail Sales, with the Italians doing their bit for the economy by continuing to shop until they drop! – forecast for this month is an encouraging 0.2% against a -0.4% last time, so well done to the Italians for carrying on with their usual spending patterns ( as an Italian myself I applaud the endeavour wholeheartedly. Finally the European news session rounds off with Private Loans, a relatively minor new release which measure the change in the total value of new loans issued to consumers and businesses in the private sector. The forecast is 0.3% against a previous of 0.6%.

The focus of attention for the euro to dollar then switches to the US with Core Durable Goods as the first important release for the US trading session with a forecast of 0.9% against a previous of 1.1%. The figure measures the change in the total value of new purchase orders placed with manufactures for items which are durable, and in the past if the number is better than expected then we could expect this to provide the US dollar with a boost. However in the current climate the reverse effect has been occurring recently with bad news stories triggering investors to purchase US bonds. At the same time Durable Goods data is also released with a forecast of 0.3% against a previous of 5.1%. These two news items are then followed by the influential UoM ( University of Michigan) consumer sentiment and inflation index data, and whilst this is a composite index it is one of the more highly regarded by the forex markets and therefore will tend to impact the euro to dollar heavily on release. The figures are derived from a large survey of consumers who are asked to rate various aspects of the economy and the Consumer Sentiment is forecast at 70.1 almost exactly the same as last months at 70.2, so little changed. Finally and 5 minutes after the UoM data we have New Home Sales, which are forecast at 442,000 against a previous of 433,000, so a marginally improved picture for new home sales in the US. As I said earlier, all of the above is against the backdrop of the G20 meetings, where any the markets will be watching for any clues, signals, or unscripted remarks as to future monetary policy and in particular the G20 view of the weak US dollar, with any pro dollar comments creating volatility in the euro to dollar pair.

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