EUR/USD is now quite close to its all-time high of 1.4970 and its short-term outlook is now dependent on US economic data. US data coming out this week include January PPI, durable goods, PCE and consumer sentiment data. EUR/USD could possibly touch 1.5000 this week if US data turn out negative.

Dallas Fed’s Fisher said he sees recent inflation news as not encouraging. His concern is upside inflation risk down the road, especially after the higher CPI rise for January, record oil prices, and the lagged impact of aggressive Fed easings. He sees slower growth, but not “prolonged negative activity”. Regarding interest rates, Fisher noted that to shift gears is “precarious” and it may be harder in practice than in theory to reverse cuts.

US dollar sentiment looks bearish at the moment as traders focus on the negative points of the US economy. Recent euphoria about the low rates stimulating the US economy has faded as inflation concerns mount. Stagflation is a truly undesirable economic situation.

Watch the forex video below:

US existing home sales 1500 GMT

ECB’s Trichet speaks 1850 GMT

Posted in Categories: Forex, Videos.

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