EUR Forex Weekly Archive
Daily Economic News - May 09, 2008
Following two straight days of losses, the EUR saw a bullish momentum, most notably against the USD as the ECB kept the Minimum Bid Rate at 4.00% and seemed to reject the idea of easing interest rates any time soon in the single currency zone. ECB President, Jean-Claude Trichet stated that the decision to leave rates unchanged was unanimous and that euro zone inflation is expected to 'remain high over a rather protracted period of time' before gradually declining again. In his hawkish speech, Trichet also said that economic data continue to point to moderate but ongoing GDP growth in the first half of 2008 and the euro zone's economic fundamentals remain sound. Following his words, the EUR rose above 1.54 and was traded at that range throughout the trading day. The Bank of England kept its Official Bank Rate unchanged as well.
The ECB has actively assisted the EUR in the forex market with a bundle of successive hawkish statements and decisions. The German Trade Balance value was 16.7B, lower than forecasts, as it reiterated that the E.U. economy still has to prove tat its consumer behavior can pick up. Although Trichet assured traders that there shouldn't be any inflationary concerns, trades should be aware of an obvious slowdown in the Euro-Zone economy.
Today, the only EU announcement that is on tap is the French Industrial Production rate which is forecasted to be negative at a rate of -0.4%. It seems like the decline in output produced by France is part of the overall European Zone trend which hasn't been too bright recently.
Daily Economic News - May 08, 2008
The Euro saw a second straight day of losses yesterday, most notably against the greenback as economic concerns within the Euro-Zone are rising. On April 22nd the EUR/USD pair hit an all time high of just over 1.60, since then investors have seen nearly a 4.5% drop. The bearishness from the 15-Nation currency can be attributed to several factors. Firstly, yesterday's news releases from the Euro-Zone, brought back less than favorable results for lagging indicators. Euro-Zone Retail Sales fell by 0.4% last month, 0.3% more than the expected drop. The number backed up indications by investors that Europeans simply do not spend as much as they could, in order to push the overall economy in the right direction. Also released to negative results was German Factory Orders, which has become a solid indicator as to the overall state of the E-Z. Orders dropped off by 0.6% and didn't help curb speculation over the slowdown in the E-Z economy.
ECB President Jean-Claude Trichet has been hawkish regarding his monetary policy and most notably his unchanged benchmark interest rate of 4% for quite some time. Unfortunately for the ECB, such hawkish ness that led to a rising EUR and EZ prosperity was not backed up by actual consumer behavior. Now, with rising inflationary concerns and an obvious slowdown in the Euro-Zone economy, the ECB and its head honcho might very well have to ease the very interest rate they longed to keep constant. The GBP, which had an abysmal day didn't do very much good either as the proximity and close ties to the Euro-Zone economy made wary investors even more skeptical about the EUR.
Today, on tap from the EZ we can expect the Minimum Rate, which is the Interest Rate on the main refinancing operations that provide the bulk of liquidity to the banking system, and will remain unchanged at 4%. German Trade Balance (expected to remain steady at 16.9B) and German Industrial Production are also expected. If Production numbers come back as forecasted with negative results expect a continuation of EUR bullishness, as German figures are normally a precursor to overall EZ numbers. At 12:30 GMT there will be an ECB Press Conference with President Trichet and VP Lucas Papademos. Volatility should be expected, as the question and answer portion of the conference coupled with Trichet's speech generally gives way to many clues as to future policy changes.
Daily Economic News - May 07, 2008
The Euro saw a second straight day of losses yesterday, most notably against the greenback as economic concerns within the Euro-Zone are rising. On April 22nd the EUR/USD pair hit an all time high of just over 1.60, since then investors have seen nearly a 4.5% drop. The bearishness from the 15-Nation currency can be attributed to several factors. Firstly, yesterday's news releases from the Euro-Zone, brought back less than favorable results for lagging indicators. Euro-Zone Retail Sales fell by 0.4% last month, 0.3% more than the expected drop. The number backed up indications by investors that Europeans simply do not spend as much as they could, in order to push the overall economy in the right direction. Also released to negative results was German Factory Orders, which has become a solid indicator as to the overall state of the E-Z. Orders dropped off by 0.6% and didn't help curb speculation over the slowdown in the E-Z economy.
ECB President Jean-Claude Trichet has been hawkish regarding his monetary policy and most notably his unchanged benchmark interest rate of 4% for quite some time. Unfortunately for the ECB, such hawkish ness that led to a rising EUR and EZ prosperity was not backed up by actual consumer behavior. Now, with rising inflationary concerns and an obvious slowdown in the Euro-Zone economy, the ECB and its head honcho might very well have to ease the very interest rate they longed to keep constant. The GBP, which had an abysmal day didn't do very much good either as the proximity and close ties to the Euro-Zone economy made wary investors even more skeptical about the EUR.
Today, on tap from the EZ we can expect the Minimum Rate, which is the Interest Rate on the main refinancing operations that provide the bulk of liquidity to the banking system, and will remain unchanged at 4%. German Trade Balance (expected to remain steady at 16.9B) and German Industrial Production are also expected. If Production numbers come back as forecasted with negative results expect a continuation of EUR bullishness, as German figures are normally a precursor to overall EZ numbers. At 12:30 GMT there will be an ECB Press Conference with President Trichet and VP Lucas Papademos. Volatility should be expected, as the question and answer portion of the conference coupled with Trichet's speech generally gives way to many clues as to future policy changes.
