The BOJ shifts goals

By GG Analyst in Reviews 0 Comment

EUR/USD

It’s a big day for the single currency today. Since Draghi took up the post as the ECB’s head the euro has become much more volatile during press-conferences after the bank’s meetings. It’s mainly due to the fact that Draghi actively employs non-traditional means to help the suffering economy of the eurozone instead of sticking to the formal approach of his predecessor Trichet, who generally strived to maintain inflation. Besides, Mr Draghi’s forecasts prove to be much more precise. For instance, he promises that the EU economy will turn to growth in the second half-year. Judging by the statistics, this acceleration more…

USD and stocks rally on strong payrolls

By GG Analyst in Reviews 0 Comment

EUR/USD

The US employment stats inspired optimism both of the stock and dollar bulls. Employment growth by 236K and decline of unemployment to 7.7% triggered the dollar rally. EURUSD dropped from 1.3130 to 1.2950. The better than expected news ( growth by 170K was forecasted) supported the rally of the stock exchanges, which as a result demonstrated the best week of growth this year. Quite a rare thing – simultaneous growth of the dollar and stock market – has its reasons, but will hardly last for long. Demand for the US assets is also logical as this country’s economy promises to demonstrate more…

Apart in happiness, together in grief

By GG Analyst in Reviews 0 Comment

EUR/USD

The newspapers are still savouring the Dow Jones high and nearly record levels of S&P 500, but in our opinion it’s worth paying attention to the risks now. The divergence between the stock markets and Oil, that we spoke about at the beginning of the week, also exists between the euro and the markets, albeit to a lesser extent. Generally speaking, the stock markets were swelling like a bubble thanks to cheap money from the Fed and CBs of other developed countries. Yet it doesn’t mean that  correction in the stock exchanges will necessarily make the euro grow. Quite the opposite. more…

An opportunity for the rate cut in EU

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency is still in the downtrend. On Friday EURUSD was depreciating. At some point its quotes went below 1.30 and now the pair is trading right at this level. Thus, already now the decline in the pair is deeper than at the beginning of the year. The dollar index is at the highest level for the last 6 months. Yet, it’s worth mentioning that in August and July the index was supported by decline of the euro. Now support is coming from other currencies (the yen, pound, Loonie, Aussie), while the euro feels quite well. However, in view of more…

Draghi is not satisfied with the more expensive euro

By GG Analyst in Reviews 0 Comment

EUR/USD

Mr Draghi met our expectations. Not that he spoke openly about depreciation of the euro or threatened with quantitative easing to weaken the euro, but still he pointed out that the increase in the euro, though reflecting that the eurozone is again trusted, may hamper the recovery. In our opinion, the markets were especially sensitive to the phrase that quick growth of the euro may impair price stability. And this implies that the CB will be ready to act should the euro keep growing. At the moment investors are puzzled which of the CBs is the least tolerant to the high more…