Fundamental Market Analysis for September 27, 2024 EURUSD
EURUSD:
On Thursday, the EUR/USD returned to its highest point since the market sell-off in the dollar gained momentum. The release of better-than-expected data from the US has helped to allay concerns about a possible slowdown in the US economy.
Despite a slight easing of recession fears, the US economy is still facing challenges, with key activity indicators showing a decline. Friday will present one final challenge for those monitoring economic data. The release of Personal Consumption Expenditure (PCE) inflation data in the final trading session of the week could have a significant impact on the market if it fails to meet expectations.
In Europe, the EU confidence figures are also scheduled for release on Friday. However, most of these indexed surveys are anticipated to remain consistent with previous readings. Euro traders are particularly focused on the release of European inflation data for September, scheduled for next Tuesday.
The recent decision by the US Federal Reserve to cut interest rates by 50 basis points prompted concerns in global markets, with some investors questioning whether such a drastic move was a reaction to the looming economic slowdown in the US. However, Fed Chairman Jerome Powell clarified that the rate cut was a preemptive measure designed to bolster the US labour market, rather than a reaction to indications of recession.
The positive data on US durable goods orders and weekly initial jobless claims further reinforced the Fed's position, with both figures exceeding expectations. The narrative of a 'soft landing' for the economy remained intact. The upcoming release of Personal Consumption Expenditure (PCE) inflation data on Friday will be a crucial indicator of the impact of the Fed's recent rate cut.
US Durable Goods Orders in August remained unchanged from the previous month, falling short of the previous month's strong increase but still outperforming the projected 2.6% contraction. Additionally, initial jobless claims for the week ending 20 September decreased to 218,000, exceeding the projected 225,000 and indicating a reduction from the previous week's revised 222,000.
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