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…

When external factors matter more than internal ones

By GG Analyst in Reviews 0 Comment

EUR/USD

The stock markets didn’t stop at the highs they hit a day ago and, as expected, rushed to their historic highs. The Dow Jones index managed to grow by those very 40pips which separated it from that target. Formally, it is explained by China’s intention to pursue its objectives regarding the economic growth, which promises demand for commodities and a better business sentiment around the world. The former correlations again revived against this background. It means that growth of the stock markets gives rise to the rally in the commodity markets, contributes to decrease in the yield of Treasuries, but also more…

Divergence of the markets

By GG Analyst in Reviews 0 Comment

EUR/USD

The US stocks continued their upsurge yesterday, Dow Jones grew by 0.3%, having recouped the previous decline and is now just 0.3% from its historic high. To some extent optimism in the stock markets (and simultaneous selling of the dollar) can be justified by Janet Yellen’s promise to continue stimulation of the economy, which functions poorer than its potential allows. This optimism boosts purchases of commonly-known risk-sensitive currencies, including the euro. EURUSD formally remains in the downtrend and on Friday the decline seemed to be even faster. However, as we warned, the level of 1.30 is too important both for bulls 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…