Macro trend bearish or bullish for the EUR?

Well, after today's release of FOMC rate decision, I have seen both arguments for the likehood of next year's decision. Many would argue that in order to boost U.S. economy, a rate cut in March is imminent- especially so when the minutes said "susbstantial cooling" of the housing market and the mix data may suggest that the fed is not ready to raise rates.

However, one factor that we have to remember is that the U.S. is much of a service economy- 80% much, with only 15% in manufacturing. (Let's not forget ISM non service was well above 50) Although what it seem to be a stream of bad news for the lower in the last couple of weeks, the core inflation rate (excluding food and energy) is at 2.9%, well above the comfort zone of the Fed. Many see the U.S. as a slow growing economy and would see the Fed raise rates. With energy prices, we are at 1.3%.

So, in the up coming weeks and into 2007, what do you think the EUR, USD will do?

1.35 by New Year's.

1.40 by March 1.

after the fed statement, I am kinda mixed on the macro trend, anyone care to share their foresight?

just my hunch that the currency will continue to rise until the feds cut intrest rates next year. i was predicting april you will start to see the fall. again just my gut feelings but i also use fibo expansions and its predicting the pound over 2.000.

the consensus was for the fed to keep rates unchanged for January of 07 and then cut rates in March. However, the U.S. is 80% a service economy and the ISM report came out great, and the core-inflation is at 2.9%- that's a decade high. The U.S. economy is slowing growing. Some people would believe the Fed will have to raise rates...

I'm liking this EUR/USD retracement. I'm buying in pieces, it shouldn't go much lower than 1.30