Good and bad news | 26 Agustus 2022

26 Agustus 2022, EUR/USD

EURUSD trading plan:

The German economy grew in the second quarter, propped up by household and government spending and beating analyst expectations that saw it on the edge of a downturn, fresh data showed. Europe's largest economy grew by 0.1% quarter on quarter and 1.7% on the year, adjusted for price and calendar effects, the federal statistics office said. Household expenditures were up by 0.8% compared with the first quarter, despite high inflation rates and an energy crisis, said the office. Government consumption grew by 2.3%. This is a positive signal for the European currency. St. Louis Federal Reserve President James Bullard said he expects high inflation to be more persistent than many have been expecting and interest rates now are not yet high enough to begin curtailing price pressures. Bullard repeated he would like the Fed's benchmark rate to climb from its current range of 2.25% to 2.50% to between 3.75% and 4.00% by year end, adding such "front loading" of rate hikes appeals to him because "you show you are serious about inflation fighting." This is a positive signal for the dollar.

Investment idea: range 0.9920 – 1.0020.

David Johnson
Analyst of «FreshForex» company
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