Gold 1946,565
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EURUSD 1,1821
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DJIA 27890
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OIL.WTI 37,81
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DAX 13255,94
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In the run-up to the ECB meeting, it is worth thinking about how the central bank will act to halt the rise in the euro. With the current weakening of the US dollar, this will be quite difficult to do, but the European currency needs to decline in order to ensure the right pace of economic recovery.
Gold
The ECB does not have many possible levers left in stock. The central bank has gone quite far, making the rate negative and further reduction of the rate will be ineffective. There are also side effects that have a negative effect on the economy. People do not receive interest on their deposits and banks have problems with margins. Rapid growth in mortgage lending leads to serious risks if the rate changes in the positive direction.
The positive dynamics of economic growth in the Eurozone are still in place and there is no reason for the data to be revised for the worse yet. There may be some decline in inflation in August, but compared to the data from July, it will not be significant.
Christine Lagarde will try to lower the Euro in her speech, but history says that after such declines the Euro is recovering very quickly.
Given the strengthening trend for the weakening US dollar, the Euro has little chance. Although we are still seeing a relative sideways trend on the EUR/USD, we can already see that the level at 1.20 will be taken soon.
Gold
In the course of current events, it is safe to say that gold is returning to its upward trend. The fundamental factors exerting pressure on the US dollar remain in force. Firstly, there is a change in the attitude towards targeted inflation. Secondly, it is an extra soft monetary policy and a huge amount of unsupported dollars that have been pumped into the economy.
It is safe to say that gold is already rebounding from serious support of $1900 per ounce and growth to $2000, and then to $2100.
What awaits us today?
14.30 Number of initial applications for unemployment benefits in the USA
14.30 ECB press conference and comments on monetary policy
17.00 Crude oil reserves
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