Forex - EUR/USD weekly outlook: September 15 - 19

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Shutterstock photo

Shutterstock photo - - The euro pushed higher against the dollar on Friday, but remained within striking distance of 14-month lows as the prospects of an early hike in U.S. interest rates continued to underpin investor demand for the greenback.

EUR/USD was up 0.33% to 1.2964 late Friday, holding above the 14-month trough of 1.2858 reached on Tuesday.

The pair was likely to find support at the 1.29 level and resistance at around 1.3015.

Expectations that the Federal Reserve is growing closer to raising interest rates continued to support the dollar, with the European Central Bank likely to stick to its looser monetary policy stance.

A study by the San Francisco Fed published on Monday indicated that central bank officials see rates rising sooner than markets expect.

The Fed was expected to cut its asset purchase program by another $10 billion at its upcoming policy meeting next week which would keep it on track for winding up the program in October, and to start raising interest rates sometime in mid-2015.

Data on Friday showing that U.S. retail sales rose in August and another report showing that consumer sentiment rose to a 14-month high in September underlined the view that the economic recovery is deepening.

The single currency has remained under pressure since the ECB unexpectedly cut rates to record lows on September 4 and unveiled new easing measures in a bid to shore up inflation in the euro area.

The euro rose to two month highs against the weaker yen on Friday, with EUR/JPY up 0.56% in late trade. For the week the pair gained 2.17%.

The yen fell to more than six year lows against the dollar on Friday amid expectations for more stimulus from the Bank of Japan.

BoJ Governor Haruhiko Kuroda said Thursday that the bank would be prepared to immediately loosen monetary policy or implement other measures if its 2% inflation target becomes difficult to meet.

In the week ahead, investors will be focusing on the outcome of Wednesday's Fed policy meeting. Fed Chair Janet Yellen was to hold a press conference following the meeting. Tuesday's report on the ZEW German business sentiment index will also be closely watched.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets. The guide skips Friday as there are no relevant events on this day.

Monday, September 15

In the euro zone, Germany's Bundesbank is to publish its monthly report.

The U.S. is to release reports on manufacturing activity in the Empire State and industrial production.

Tuesday, September 16

The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.

The U.S. is to produce data on producer price inflation.

Wednesday, September 17

The euro zone is to release revised data on consumer price inflation.

The U.S. is to produce data on consumer prices. Later Wednesday, the Federal Reserve is to announce its federal funds rate and publish its rate statement. Fed Chair Janet Yellen is to hold a press conference following announcement.

Thursday, September 18

The U.S. is to produce a flurry of economic data, including reports on initial jobless claims, building permits, housing starts and manufacturing activity in the Philadelphia region.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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