Draghi is beginning to resemble Trichet

By GG Analyst in Reviews 0 Comment

EUR/USD

The euro climbed quite high yesterday, after Draghi’s words that the monetary policy doesn’t need any adjustment now. The ECB is still confident in the positive effect of the November rate cut, but adds that it is not very visible yet. We’ve frequently mentioned that the currency markets suffered a period of even higher rates  of the euro short-term loan before the New Year Day. The impact of the decline by quarter of a percent can be noted only with other conditions being equal, which never happens in the market. And the unwillingness to take advantage of inflation slowdown to ease more…

EUR is among safety assets

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the stock markets suffered a hard blow. The worn-out exchanges of the developing countries were knocked down. Most of them lost more than 2% over the day. Now we have quite an unpleasant situation on hand. The US Fed ignored the warning signals of the slowdown in the business activity and cut the QE programme last week. Thus, the markets are now sure that the only thing which can prevent the Fed from taking a similar step in the future is utterly disappointing statistics from the USA. Against this background the US investors, anticipating further cuts,  very painfully reacted to more…

Attack of USD

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency depreciated against the dollar yesterday. Having started Thursday at 1.3660, EURUSD finished it at 1.3550. It fell right to the area, where it had begun its upsurge a week before on the release of strong PMI stats. In our opinion, that movement was nothing more than washing out of short positions. Too many spoke about strength of the dollar on the threshold of the Fed’s meeting. In such cases big players often announce hunting for stops and kick a part of small investors off the market. It gives an opportunity to sell expensive or buy cheap, depending on more…

EM vs DM

By GG Analyst in Reviews 0 Comment

EUR/USD

In the Fed default softness gave place to default tapering. Yesterday FOMC announced reduction in purchasing of bonds and mortgage-backed securities by 10bln dollars starting with the next month (by 5bln in each group). This decision in general met the market expectations as the reaction was relatively moderate. The range of fluctuations in EURUSD after the news release didn’t exceed 30 pips. Partly it was due to the fact that earlier in the day there was stop-hunting with orders collected between 1.3650 and 1.3600. It was really surprising to see how EURUSD dropped from 1.3685 to the daily low of 1.3602 more…

Emerging defensive

By GG Analyst in Reviews 0 Comment

USD/TRY

Emerging markets are on the defensive now. The capital outflow from such countries as India and Turkey made their CBs sharply raise the interest rates, thus making investment in these currencies more attractive. Last night the Turkish CB increased its overnight lending rate from 7.75% to 12%, and one-week repo rate from 4.5% to 10.0%. This measure, surprising in its scale, boosted a rally in the emerging markets and supported strengthening even of such currencies as the Australian dollar. Albeit at a smaller scale, yesterday the Russian CB conducted interventions at approximately a billion dollars, along with that exceeding the more…