Euro could rise as ECB Stimulus Bets decrease U.S. Dollar at risk

The euro could rise with the German CPI data and the change of EU policy in relation to the restriction of the austerity measures for the ECB stimulus. The U.S. dollar could fall to a expansionary monetary policy favorable tone of the Fed.

Interview approaches

Euro could rise with German CPI and the EU policy recommendations

U.S. Dollar at risk if Feds Rosengren pours cold water on QE3 Bets to reduce

The currency markets are facing a full calendar with fundamental event risk in European trading hours. The preliminary data for German CPI in May are expected to show that inflation has risen year on year to 1.3 percent, the first increase in five months. This could be the publication of data on regional price increase overshadow later in the week, the euro could help because the trader downgrade expectations on a short-term extension of the ECB easing.

At the same time is European commission their annual series of economic policy recommendations published for all EU Member States, which probably lead away the efforts of the officials of the budget consolidation and will head towards combating the recession. A supportive attitude of the financial side of the political spectrum should be the burden of the tax authorities to do more to facilitate the promotion of recovery. The accommodation could also be viewed as a reduction of the ECB and driving the single currency higher.

The Unemployment report from Germany rounded off the agenda, and the expected forecast that the economy has shed 5,000 jobs in May. If the data corresponds to the matching forecasts, they are within the average 12-month trends and should therefore provide the traders little to fundamentally changing information. This means that without a significant deviation from expectations, the impact of these numbers will likely be limited to the price movement.

During the day, the attention turns to the speech by Eric Rosengren Federal Reserve , which will discuss the outlook for the U.S. economy and answer questions. Mr. Rosengren is a voting member of the FOMC interest rate key committee this year, and traders will undoubtedly interested pay attention to whether it addresses a short-term limitation of Fed asset purchases. With the references of the Fed presidents from Boston, who favor an expansive monetary policy, there seems to be a distinct possibility that his comments pour cold water on calls for a reduction QE3 and the U.S. dollar could weigh.