EUR Forex - Archive
Daily Economic News - Mar 31, 2008
The EUR responded well last week as a combination of positive Euro-Zone (EZ) data and poor US numbers, saw the EUR/US pair rise back toward record highs. As we enter the new month, there is a substantial chance that we will see the popular pair touch 1.60. Last week, the EUR showed its force as it made gains with only a small amount of economic data on the calendar. Drawing from momentum from early German Ifo numbers, the 15 Nation currency closed to within 100 pip of its record high versus the greenback and pushed rates versus a majority of the currencies traded in Forex.
This week looks to be the same as we can expect a host of economic events from the Euro-zone, of which only a few should force any market movement. Manufacturing PMI, Retail Sales, PPI and Unemployment data, look to be the relevant factors from the EZ for this week's market. The figures are expected to come back within range of their previous marks.
One point of interest to many investors is the lack of any big push by European consumers to spend more. With their currency valued at a high mark, and the liquidity and prosperity of their home economies growing, spending has stayed stable. It could be a result of many factors, nonetheless a rise in Consumer spending could be a good sign for the already flourishing Euro-zone.
The only major concern filtering out of the Euro-zone is the possible write-down by German banking giant Bayern Landesbank. Landesbank is expected by some European analysts to write-down Close To 4 Billion Euros, almost double initial expectations. This could be seen as a stepping-stone to future behavior by bigger European banks. Still though it is doubtful that this could offset the current bearish trend by the dollar, as we should expect the EUR to make consistent gains throughout the week.
Today, we can expect the release of Euro CPI and Consumer Confidence figures. These should not contribute much to the movement of the EUR.
Daily Economic News - Mar 28, 2008
The EUR broke the 1.58 level against the USD during the early New York trading session yesterday, but it was finally down 0.6% by the end of the day at $1.5757. Banks were the top positive influence on the broader European equity market after the central banks of Britain and Switzerland promised extra funds to ease pressure on interbank lending rates, while the European Central Bank said it was ready to step in with extra cash if needed. It remains clear that the ECB will likely remain focused on its inflation and will probably leave its benchmark lending rate unchanged at 4.0%. There is no significant economic news expected to come out of Europe today. The near term outlook for the EUR, remains quite bright as most analysts believe that the EUR will once again head towards the 1.6000 level against the USD. Look for the EUR to continue to gain strength on most currency pairs, namely those that don't include JPY and USD.
Daily Economic News - Mar 27, 2008
The EUR spent another day yesterday, as the top currency in the trading session. If this were a horse race, the EUR would be your "sure bet" as everything seems to be going right once again for the Eurozone economies. As stated in the daily analysis yesterday, the "slight drop" in German Ifo numbers never came as both Climate and Expectations indices came back with positive results pushing bullish EUR pairs higher and higher. This was the highest index for the German Industrial sector in 7 months and there doesn't look to be much that can deter it from becoming 8 months in April. Industrial Orders also came back with a 1.5% increase in forecasted growth, as this helped facilitate the last push in yesterday's EUR/USD rally.
One of the more important news stories of the day was the push by French President Sarkozy to tighten relationships with the UK in both the political and financial sectors. He also touched on the importance of the two nations getting the US to strengthen the Dollar, in hopes that it will ease some of the import/export tensions, concerning a widening in price differences between American and Eurozone suppliers. Also speaking yesterday ECB President Jean-Claude Trichet reiterated his stance in staying out of policy change due to market turmoil. His hawkish stance, though sometimes considered by some to be hard headed has proven to be helpful in keeping the EUR up against its currency rivals Trichet also discussed the needs for nations to be more transparent in regards to both positive and negative aspects of their economies. In a speech to the EU parliament he said "We see that all the situations where you have an absence of transparency; whether it is markets, whether it is instruments or whether it is institutions are conducive to hectic behavior of markets…"
Today the only news event form the Eurozone was the early morning release of German Consumer Confidence which rose by 0.1 points to 4.6. This had little affect on the market, and most of today's movement will likely come from the US related news. Expect the EUR to make gains throughout the market, and make a push toward 1.60 for the EUR/USD pair
Daily Economic News - Mar 26, 2008
The Euro had a solid day of trading yesterday, after rebounding from an abysmal week of trading in the past few days. Much of the momentum has come from the switch in the trend of the dollar, but credit must also be given to Eurozone economic figures as well. Though we haven't had any this week, today we will get a fair share. Expected German IFO data has been the driving reason behind bullish trends by the EUR. The figures are expected to see a slight drop, but the data is still higher than most of the nations around the world. Every month the German confidence figures are forecasted to come in with a "slight drop" and then surprise everyone with good news instead. Additionally, the hawkish monetary policy set forth by the European Central Bank has prevailed, and has driven the 15-Nation currency to record numbers in the recent months.
World markets are now familiarizing themselves with the "European Consumer", who suddenly has more purchasing power and a more valued currency than ever before. Speculation over the strength of the European consumer still exists, and rightfully so. Nonetheless, we should continue to see growth from the Eurozone as well as the EUR currency pairs and crosses.
Today we await the release of the aforementioned German IFO figures, more specifically, German IFO Business Climate Index and the German IFO Business Expectations Index. Also on the calendar for today is the Eurozone Current Account balance and New Industrial Orders, which are expected to rise. The figures from the EU will be accompanied by remarks by ECB President Jean-Claude Trichet. Once again, barring any surprising swing in expected data, the EUR should rise throughout the day.
Daily Economic News - Mar 25 , 2008
After last Tuesday's Federal Reserve's cut of the US key interest by 0.75%, the EUR began the trading week yesterday in a relatively bearish notion. The 15-nation currency saw no major movement after the day's first half, mainly due the lack of important figures release from both coasts of the Atlantic. However, later, the EUR sharply appreciated against the greenback adding 1.4% to its value in a couple hours.
The EUR pushed back from its bearish stance, which characterized it at the end of last week, mainly as a result of oncoming worries of another Interest Rate cut by the Fed attached with near term US recession speculations. Moreover, the positive economic signals released from the US yesterday, such as the Existing Home Sales report, did not helped the USD weakening move and the EUR/USD ended the trading session with an appreciation of more than 200 pips.
As seen on last week's German reports, the strong EUR keeps damaging the Euro-zone exports. This fact, combined with the high inflation rate seen recently in the Euro-zone, does raise speculations of ECB interruption to try relaxing the volatility of the market.
Today, there is no expected important news release from the Euro-zone. However, for the CHF investors, the Swiss Consumption Indicator for the previous quarter is expected to be released. The EUR will most probably keep its bullish trend for the short term, especially due to the fact that the US's Consumer Confidence release today is not expected to bring the USD to recovery.
Daily Economic News - Mar 24 , 2008
Last week, most of the EUR behavior came from reactions to the news released from the United States. The 15-nation currency is riding a bearish trend since the announcement of the US rate cut. The greenback recovery after the rate cut encouraged many investors to short the most traded pair trying to benefit from the psychological impact of the positive news from the US. As a result of that, the EUR/USD pair closed the trading week very close to the rate of 1.54. The falling trend continued at the start of this week's subdued holiday session as the pair traded below the rate of 1.54 USD. Adding to the dollar bullishness was the lack of important news from the European market last week. Eurozone news might have offset the bearish trend, or at least slowed it down. Instead the only significant European event (EU Trade Balance) came back well below expectations and only legitimized the falling trend of the pair. Looking ahead, traders should pay close attention to this week's economic news and figures released from both Atlantic coasts. Expectations show two differing trends as there are positive figures from the US expected, which will help push dollar buying. Speculation about the deep damage of the exporting sector in the Eurozone is gaining steam as a result of the rising volatility in the slumping EUR. Moreover, there are many worries in the EUR regarding the current interest rate and the inflation level. Still though, without fail, ECB President Jean-Claude Trichet was steadfast about his hawkish stance and took no action.
Most of the figures due to be published this week are related to the German export/import sector and economy. The German Ifo Business Climate Index is to be released on Wednesday and the German Import Price Index m/m release on Friday should supply much needed information about the short term direction of the European currency which we expect to see hold its bearish course at least for the next few days.
Daily Economic News - Mar 21 , 2008
The Euro was bearish all across the board yesterday, as the 200 point slide in EUR/USD led the charge in EUR losses throughout the Forex market. One of the big problems facing the Euro-zone is inflationary scares throughout the sectors of the Euro-zone economy. With production prices on the rise, due to local matters and competing with the drop in US production prices, the Euro-zone will have to cope with the ever-changing outlook of the world economies. Still though, this tension could be temporary as German manufacturing and service PMI figures returned with similar results to previous months, and big European companies have reported no real detriment to production due to higher prices.
The EUR has had a tumultuous week seeing a steady drop from its high numbers in weeks past. The stock market in Europe also has seen some trouble as it has dropped for 6 straight days, but it still doesn't seem to be enough to warrant ECB intervention. We have repeated on many occasions the hawkishness of ECB President Jean-Claude Trichet, whose monetary policies have not changed even amongst sharp changes in the EU currency. After a week's worth of soft Eurozone data, the ECB seems content in letting the currency fend for itself.
Today, we expect French and Italian consumer spending reports which will likely contribute little to what is already expected to be a clam day of trading. It will be interesting to see how next week begins as no scheduled events are expected from the Eurozone until Wednesday. At least, for today expect range trading throughout the market.
Daily Economic News - Mar 19 , 2008
Yesterday, the Euro-zone was absent from the economic calendar and most of the Euro movement was contributed to the dominance of the Dollar yesterday. The EUR depreciated yesterday against the greenback on the back of key interest rate cuts in the US. The EUR retreated from its all time high at the rate of 1.5850 from last week as the pair closed the trading session down 150pts. However, looking ahead long term, the EUR is expected to recover and gain back some of its losses from yesterday, mainly as a result of the continuing positive indicators being released from the Euro-zone. Meanwhile the GBP appreciated against the USD and peaked at a three days high at the rate of 2.0255 in the first half of the day. However, after the Fed's key interest cut, the GBP lost most of its gains and closed the trading session at the rate of 2.0080.
Looking ahead to today, the only news expected from the European economy will be the Trade Balance. This figure is considered insignificant to Forex market movement and should not have any impact on EUR behavior today. Meanwhile, the MPC Meeting Minutes from the Bank of England (BoE) is expected to be released in the United Kingdom. The minutes are forecasted to show that 8 BoE members voted to hold the interest rate and 1 BoE member voted to cut it. Forex traders should follow this figure because it could have an extreme effect on the GBP behavior during the day.
Daily Economic News - Mar 18 , 2008
The Euro-zone was devoid of any significant data releases and most of the EUR movement was dollar-centric. The EUR opened the week on a sharp rally against the greenback after news of the Bear Stearns collapse and the emergency discount rate cut. However the EUR did lose some of its previously gained ground as market tensions eased. The main reason why the sharp EUR rally was cut short later on yesterday was due to the Market News International (MNI) report. It claimed that the ECB will increase verbal intervention in the near term as they are increasingly worried by a free-fall in the dollar. Also according to the MNI report there is increasing pressure within the ECB to get the US to act on the weak dollar. Nevertheless, it is important to note that there is a split opinion within the ECB Council regarding intervening against the strong EUR.
Looking ahead to today, the only news expected from the European economy will be the Italian Trade Balance. This figure is considered insignficant and should not have any impact on the EUR. All eyes today will shift towards the FOMC meeting later on today and any EUR sharp movement will once again be dollar centric.
Daily Economic News - Mar 17 , 2008
The EUR continued to hit record highs against the greenback on Friday on the back of negative U.S data coupled with Bear Stern's woes. In stark contrast to the U.S, the Euro-zone yearly CPI figure released at 3.3% which was slightly better than the forecasted 3.2%. Also German monthly CPI came in at an unchanged 0.5%, reaffirming the solidity of the German economy despite the strong EUR. The interest rate differential between the U.S and Europe has been continuously widening over the last few months and it is expected to widen further at the FOMC meeting on Tuesday. Therefore this is currently making the EUR the most favorable currency amongst investors, as it offers a higher yield and lower risk.
Earlier today during the Asian trading session the EUR struck another peak against the greenback, touching the 1.5902 mark. This is still mainly due to the aftershock of the emergency rate cut by the Fed which only added to market jitters of the near-collapse of US investment bank Bear Sterns. Looking ahead to today, the only news from the Euro-zone will be the Employment Change figure which is not considered significant and it will not have any impact on the EUR. Therefore EUR movements today will remain dollar-centric and with a rate cut expected in the U.S on Tuesday, the EUR bulls should have a rodeo and push the European currency further up into unknown territory.
Daily Economic News - Mar 14 , 2008
The EUR is being traded in a consistent fashion and it rallied later on yesterday to stay above the 1.56 level against the greenback. The EUR has become a mainstay in the global economic world, as some see it as the world's new dominant currency. It seems as if any gain from the greenback is not substantial enough to deter the overwhelming strength that the 15-Nation currency has had lately. The sentiment for the U.S. dollar continues to worsen, and the dollar fell for an additional day to a record low versus the EUR. The U.S. currency fell to an all-time low as continuing flow of weak economic data from the US erode confidence in the world's top reserve currency. The EUR rose to a new high of $1.5625 following a report that showed U.S. retail sales fell in February, beating a day-old record of $1.5559. It later fell back to $1.5587 in late New York trading, still above the $1.5526 it bought in New York on Wednesday. Fears over the U.S. economic outlook raise expectations that the Federal Reserve will continue to cut interest rates, even as the European Central Bank sticks to a tough anti-inflation standpoint and signals that no rate cuts are on the way for the 15-nation euro zone. Therefore as long the interest rate differential between the U.S and Europe continues to widen, the EUR will remain the preferred currency amongst traders.
Daily Economic News - Mar 13 , 2008
Despite comments from ECB President Jean-Claude Trichet and the French CPI release, the Euro reached a new all time high yesterday against the USD. Trichet stated in a speech to the Gulf Cooperation Council that he is "alarmed by the excessive movement of currencies". Trichet went on to explain the importance of the U.S. stance on a strong dollar, adding that he was not campaigning for international use of the Euro as a replacement for the dollar.
French CPI showed that the month-to-month rise came back below expectations of 0.4% and rose by only 0.2% from January. Investors should continue to see the EUR as a steady investment as we are still in a volatile trend due largely to the sub-prime crises in the US.
Today sees two minor events from the Euro-Zone. First, is the French Nonfarm Employment report that is forecasted to stay on par with last month's figure. It will be followed by the 9:00 GMT release of the ECB Monthly Bulletin; this month's bulletin is expected to provide statistical data for the latest interest rate decision as well as detailed analysis of the prevailing economic situation and the risks to price stability.
Expect the EUR to continue to remain a solid investment for today due to a lack of data published today from the Euro zone, and fears from traders expecting the worst from the greenback.
Daily Economic News - Mar 12, 2008
The EUR retreated from its all time high against the greenback yesterday on the back of the Fed announcement of its new measurements to inject funds into the money market. However there was positive news for the EUR yesterday, which pushed the EUR to a new record high, as both the German and Euro-zone ZEW Economic Sentiment surprised on the upside. Analysts believe that the firmer-than-expected reading indicates that investors in the German economy are becoming slightly more optimistic that they can avoid the worst of the fallout from the US slowdown. Nevertheless, this positive data which pushed the EUR upward was not enough to cushion the EUR's fall against the greenback. Also earlier ECB Member Weber hinted in a statement that the ECB was not in a position to lower interest rates due to the rising German inflation fears. The ECB has kept its key benchmark rate unchanged at 4.00% since the credit crisis erupted and it has since then stressed that inflation remains its primary concern. However the strong EUR should dampen exports which will slowdown growth and place the ECB under pressure to lower rates. Nevertheless, the central bank remains optimistic as 50% of European exports are within the EU and so far economic indicators have not shown any clear signals of a significant slowdown. The EUR will remain resilient due to improved German GDP expectations and it should resume its bullish movement against the greenback after yesterday's sharp fall.
Daily Economic News - Mar 11, 2008
The EUR dropped slightly lower yesterday on the back of comments from ECB President Trichet warning of excessive volatility in the currency markets. The EUR hit a record high against the greenback last week touching the 1.5459 level after the ECB held Euro-zone interest rates firm at 4.0%. However the EUR now seems to be correcting on the back of Trichet's comments. Nevertheless, analysts expect this correction to be short lived as these comments were still perceived as relatively dovish. In addition further inevitable weak U.S data will give the EUR an offensive edge against the greenback.
There was a string of European data released yesterday and most of the figures surprised on the upside. The most significant data to note is the better-than-expected release of the German Trade Balance, which is still on the increase despite the appreciation of the EUR. Looking ahead, the most important news to be released today will be the German ZEW Economic Sentiment which measures institutional investor sentiment in the German Sector. The German economy is one of the key players in the EU and is heavily reliant on exports. Therefore the ZEW Economic Sentiment will shed more light for investors as to how the German economy is holding up despite the sharply appreciating EUR. The EUR may still continue yesterday's correction but it is more likely to resume its bullish surge against the greenback on the basis of further expected weak U.S data. However traders holding long positions on the EUR should remain weary of the upcoming U.S Trade Balance figure which may trigger a USD rally.
Daily Economic News - Mar 10, 2008
The EUR ended last week with a blast as it hit a record high of 1.5463 on news from non-farm payrolls out of the US. The gains were somewhat short-lived as outside circumstances, namely carry trades came under pressure. The EUR also had to deal with news that the US Federal Reserve planned on extending their lending policies to ease USD weakness.
As global economic data has been anything but promising, news from the Euro-zone has been solid and consistent, helping the 15-nation currency keep one foot in front of the rest. Last week, German industrial numbers helped keep the EUR on the rise against most of the major traded currencies. Some within the ECB warn now, that ECB President Trichet must be wary of inflationary risks as commodity prices are rising all across the board at an alarming rate. This puts the ECB in a precarious position; on the one hand they are the owners of the steadiest, and currently most reliable currency, however the strength of the EUR has taken its toll on local businesses competing at a global level with Asian and American companies. Plainly said, a European exporter selling goods in America is now troubled as the EUR/USD rate makes the goods he sells far more expensive for the average consumer. Investors will likely see some easing of policies by the ECB in order to deal with these issues in the near future.
On the docket for the EUR this week, there is a combination of significant data. Most notably, we will await the German Trade Balance as well as ZEW survey. This should give us a clear indication of the upcoming future of the EUR. As the figures are expected to be EUR positive, look for the 15-Nation currency to make gains on its major rivals throughout the week.
Today we await the 7:45 GMT release of French Industrial Production, however, it should not contribute very much to market volatility.
Daily Economic News - Mar 06, 2008
The EUR had a fabulous day of trading yesterday, as anyone focused on bullish EUR trends was successful. The 15-Nation currency hit record highs versus the dollar and used that momentum to do so against the GBP as well. Mentioned earlier, the EUR touched the 1.53 level versus the greenback and then climbed to an all-time high against the sterling at just above 0.7685. This activity came mainly as a result of PMI and retail sales figures returning better than initially forecasted. German PMI, which measures the activity level of purchasing managers in the manufacturing sector, came back at 52.2 up from its previous mark of 49.2 as retail sales rose by 0.4%.
Yesterday's events all but solidified the ECB's hawkish monetary policy, as many believe that ECB President Trichet will do nothing regarding the interest rate. The biggest issue facing the Central Bank is controlling the rising inflationary pressures brought on mostly by rising global food and oil prices. As we await words from Trichet tomorrow , expect the market to react positively regarding the EUR.
Apart from the expected interest rate statement and Trichet's speech, we will see French Budget Balance released today, as it should not contribute to any real market movement.
Investors in the EUR should look for another day of gains, as the major currencies competing against the Euro-zone currency are currently involved in a swing of negative data.
Daily Economic News - Mar 05, 2008
The EUR had a stable trading session all across the board yesterday. The EUR has reached a new all time highs against the greenback on each of the last five consecutive days. However this record setting trend was halted yesterday by comments from leading European Finance Ministers ahead of the ECB meeting on Thursday. Chairman Juncker of the Eurogroup of finance ministers mentioned his concern about the current excessive exchange rate volatility and this gave the greenback some reprieve. The only news coming in from the Euro-zone yesterday was the GDP and PPI figures, which released inline with expectations at 0.4% and 0.8%, respectively. This news did not have any effect on the EUR, which continued to remain solid throughout the day.
Looking ahead to today, we expect the Euro-zone Services PMI and Retail Sales figures. However these figures will not impact the EUR, which may slip slightly versus the greenback today as traders exercise caution ahead of Friday's NFP report. However the broader EUR outlook is still very bright as no ECB rate cut is expected any time soon, while the Fed is expected to cut rates by at least 0.5%. Many analysts believe that the EUR will target the 1.5500 level against the greenback.
Daily Economic News - Mar 04, 2008
Yesterday, the EUR ended its trading session 0.3% higher, closing at 1.5223 vs. the USD. Earlier, the currency pair had hit a record peak of $1.5275, after Warren Buffet speculated that the U.S. economy is already deep in a recession. European Manufacturing PMI was unchanged yesterday at 52.3, signaling that the growth of the European manufacturing sector is slowing down. Along with record energy costs, the soaring EUR has made European exports less competitive, adding pressure on the Euro zone economy. Additionally, the European CPI, which measures the rate of inflation, remained yesterday at a record high level of 3.2%. Unlike the Federal Reserve, ECB President Jean-Claude Trichet is placing greater emphasis on inflation rather than on growth. Therefore, following the latest inflation data, the ECB is widely expected to keep Interest Rates unchanged at 4.00%. Recent economic data gives the ECB all the justification that it needs to remain hawkish, especially as commodity prices climb to record highs. As for the mid-term forecast, here is the equation; as long as 'inflation pressure' prevents the ECB from slashing its Interest Rates, the European currency is expected to stay elevated. Toady's European economic calendar will be relatively quiet with only the PPI and the GDP figures on tap, both of which are of minor importance to market movement. If these indices will bring stronger figures than forecasted, the EUR/USD may press even higher and any retracement should be seen as an opportunity to add to long positions.
Daily Economic News - Mar 03, 2008
The EUR has become the beneficiary of the latest USD woes, as it once again gained significant ground against its American rival last week. In total the Euro gained over 2% on the greenback in February, its biggest gain since September of last year. As the EUR grows against the dollar, investors should begin to take into consideration a Euro interest rate cut. ECB President Jean-Claude Trichet has been adamant in keeping with his hawkish monetary policy, however the growing divide between the EUR and the dollar is taking its toll on the whole of the Euro-zone economy. The already tense European import/export industry is now faced with even more hurdles as it cannot compete globally with such inflated prices due to its currency strength.
The 15 nation currency has seen gains against a majority of its most traded currency rivals, outside of the JPY, whose current strength cannot be rivaled. The Euro-zone has the opportunity within the coming months, assuming that there is a change to monetary policy, to flourish and allow its currency growth to come naturally and not from pure trading momentum or Dollar fears. The importance behind EU economic data moving its own currency is critical in convincing wary dollar investors that the growth is real.
The economic calendar this week from the Euro-zone holds several key events. We expect that Thursday morning's scheduled Interest rate statement will involve a small cut in the interest rate. This will be followed by remarks by Trichet who normally triggers some market fluctuation in and around his speeches. Today we expect the release of German Manufacturing PMI and CPI figures, both of which are forecasted to come back with similar numbers to their last release. Either way, they should not effect market movement, as we expect rises in the EUR sans EUR/JPY to continue.
