Fed’s cautiousness about further incentives triggers the dollar rally

By GG Analyst in Reviews 0 Comment

EUR/USD

The Fed’s minutes published yesterday afternoon produced a dramatic influence on the market. They made it clear that the Fed is now less inclined to provide further incentives for the economy. Speculators immediately reacted to that, having started to buy dollars and sell risky assets and currencies. As a result, the single currency, for example, sank from 1,3340 to 1,3215 in an hour. During the Asian session sales continued, which brought the pair below 1,32. Exactly the soft Fed’s policy, which doesn’t fully fit the current circumstances, is called the impetus of the 30% rally in the stock markets since last more…

Will Fed’s greater transparency support the markets?

By GG Analyst in Reviews 0 Comment

EUR/USD

In its global economic forecasts the International Monetary Fund tries to intimidate the world and the European leaders in particular. The IMF expects the GDP growth to make 3.3% in 2012, but if the Old World wallows in new grave problems, the GDP is forecasted to be only 1.3%. In fact, such slackening is likely to be caused by the crisis spreading far beyond the euro area and hampering the growth of the emerging countries. Specifically to the eurozone IMF’s chief economist Blanchard promised a 0.5% decline at year-end. Of course, that warning should be viewed in the context of the more…

Euro Rallies on Draghi’s Speech

By GG Analyst in Reviews 0 Comment

EUR/USD

Draghi, the head of the European Central Bank, decided not to change the policy. At the ECB’s regular meeting it was decided to keep the main refinancing rate at 1%. Apparently, the reason was that the economy is mainly going in line with the preceding forecasts. We remind that these forecasts promised “a mild recession”. The possible deterrent is the fact that the previous easing in November and December and the inflation rate exceeding its target level of “just below 2%” haven’t taken a full effect yet. It’s remarkable how energetic Draghi was, urging politicians to engage in immediate resolving of more…

Euro: Down and Out

By GG Analyst in Reviews 0 Comment

EUR/USD

The wave of the euro sales hasn’t taken long to appear. Already yesterday the single currency dipped close to 1.30 and stopped only 8 points above that level. Once again the movement was caused not by statistical data, but by politicians’ pledges. Throughout the day it became clear that there were certain difficulties in fulfilling those minimum requirements that had been proposed at the summit. The countries were again acting as sovereign states, defending their own interests. The ECB’s representative reminded that the Bank was unable to pursue the same policy as the Fed and couldn’t be a lender of last more…