EUR/USD update (20th Aug 2012, 06:00)

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by Market Moves Staff

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In US trade, the euro slid fractionally against the dollar as traders pared back expectations of further quantitative easing from the Fed.

Friday was another modestly ‘risk on’ session across global markets, which normally would have been a boost for risk currencies but a stronger USD saw the euro post marginal declines.

Despite German Chancellor Angela Merkel again reiterating her support of Mario Draghi and the ECB, the euro slipped as better-than-expected economic data out of the US saw analysts winding back their expectations of more QE from the Fed at its next meeting in mid-September. It promises to be an interesting week ahead for the euro, with a number of highly important eurozone meeting set to take place. Angela Merkel and French president Francois Hollande are scheduled to meet on August 23 followed by Greek Prime Minister Antonis Samaras meetings with Ms Merkel and Mr Hollande on August 24 and 25 respectively.

Both meetings will be closely watched and could have a material impact on sentiment toward the euro. Having ended Friday’s Australian session around the 1.2350 level, the euro dipped slightly to end US trade at 1.2334. Upon reopening for Asian trade the euro is essentially unchanged.

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