26.07.201812:08 Forex Analysis & Reviews: For further growth of the euro, specifics from the ECB are needed

Yesterday, the euro rose at the end of the North American session after the announcement of the results of the meeting between the US president and the chairman of the European Commission.

Data on the US economy also exerted some pressure on the US dollar. According to the report, sales of new homes in the US declined in June, indicating some weakness in the housing market due to rising stocks and lower prices. Despite this, it is unlikely that such a trend can be called sustainable. The reduction in prices is only temporary seasonal.

According to the report of the Ministry of Trade, sales in the primary housing market decreased by 5.3% in June this year and amounted to 631,000 homes per year. Economists had expected sales to fall to 669,000 homes a year. For the first half of the year, sales increased by 6.9% compared to the same period of the previous year.

As I noted above, all attention yesterday was focused on the meeting of US President Donald Trump with the chairman of the European Commission Jean-Claude Juncker. The meeting brought a fairly good result for the European Union, as it weakened the heat of the trade conflict between the US and the EU. At a minimum, it became clear that the US will refrain from introducing new duties and are open to further dialogue on various positions.

Also, Trump and Juncker agreed to begin a discussion on the abolition of duties and subsidies. The problem in the negotiations was the cancellation of duties on steel and aluminum, which the Trump administration introduced in the spring of this year. Also, it was about canceling the response fees from the European Union.

Despite the quite convincing outcome of the meeting, the market reacted with a moderate increase in risky assets, since the EU needs the support of all 28 members o reach an agreement. Disagreements can be with the leaders of the EU, France and Germany, trade priorities are often divergent.

Also yesterday it became known that Japan and Germany would create a separate union to support free trade, which runs completely counter to the policies of Juncker and Trump.

During the press conference, Jean-Claude Juncker said that he intended to reach an agreement today, and he achieved it. Juncker also noted that, according to the negotiations between the US and the EU, there will be no new duties, and in the near future there will be a review of duties on steel and aluminum.

The focus today will be on the decision of the European Central Bank and at a press conference that will take place a little later. Many expect specifics from the European regulator on interest rates after statements made at the last meeting, when the ECB indicated that interest rates will remain at the current level, at least until the end of the summer of 2019.