At the ECB meeting last Thursday, it was decided to leave monetary policy in the Euro area unchanged. The volume of asset purchase program was left at the level of 80 billion euro (88 billion USD) per month, while core interest rate was kept at 0% (the rate on deposits for commercial banks is -0.4%). The ECB President Mario Draghi did not give any indications of the monetary policy prospects in future. QE program decision in Eurozone was postponed until the meeting in September.

Although today’s German IFO indices of business optimism and economic expectations for July were positive, macro-economic indicators of Eurozone are generally weak. European composite purchasing managers index (PMI), released last week, fell to 52.9 in July against 53.1 in June, reaching 18-month lows. Positive balance of the current account surplus was at the level of 30.8 billion euro in May (34.0 billion USD) against 36.4 billion Euro in April. Economic prospects of Eurozone have deteriorated after Brexit.

On the other hand, US positive macroeconomic statistics raise investors' expectations of the possible raise interest rate hike this year. Currently, futures for the US Fed interest rates indicate 25% probability of a rate hike in September. The probability of a rate hike in December is 43%. These facts contribute to the rise in the USD.

On Wednesday at 20:00 (GMT+2) Fed’ interest rate decision will become known. It is expected that the rate will be left unchanged. Investors ' attention will be focused on the Fed's comments, which may indicate future prospects of the US monetary policy.

It is likely the before the announcement of the interest rate by the US Fed the pair EUR/USD will remain under pressure.

EUR/USD: Monetary policy of the ECB was left unchanged. Fundamental analysis for 25.07.2016.

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