FX Weekly Insights 27/11/22

Valdis Dombrovskis, European Commissioner for Trade (Source: European Commission)

This week's story discusses the problems Europe and the US face in arriving at an agreement over the potentially distortionary and discriminatory effects of the Inflation Reduction Act, which will undermine EU manufacturing and is believed to violate WTO rules. A quick agreement is unlikely to be reached, to the detriment of the EU and Transatlantic relations and to the benefit of China seeking strategic opportunities to keep a foothold in green transition technologies and chip/semiconductor industries.

Essential data will be the (US) PCE m/m due Thursday and (US) NFP on Friday.

EUR/USD resistance 1.0473 and major support 1.0203 and if the PCE is 0.2% lower, 1.0500 should be surpassed.