Cyprus bailout

By GG Analyst in Reviews 0 Comment

EUR/USD

The word “bailout” presupposes some aid, easing of the lot of the rescued. Earlier money allocations to the rescued Greece, Ireland, Portugal and Spain led to growth of the single currency, albeit the short-term one sometimes. Yet it is different with Cyprus, “rescued” last Saturday. EURUSD dropped by 1.5% after the EU’s decision to impose a one-off 9.9% levy on accounts with more than €100K. Smaller deposits will be taxed at 6.75%. Altogether, it should bring €5.8bln to the government of Cyprus. The EU will allocate another 10bln. Earlier it was calculated that Cyprus would need about 17bln, but the IMF more…

Spain takes Italy’s investors

By GG Analyst in Reviews 0 Comment

EUR/USD

All that Italy didn’t get went to Spain. Here we speak about the debt auction that was held in these countries on Wednesday and Thursday accordingly. EURUSD reacted accurately to the markets’ message. If on Wednesday it was decline due to the low investor demand, yesterday the single currency was brought back nearly to the same levels: it’s again trading a bit above 1.30. Yet, it’s worth mentioning that weakness of the dollar also contributed to sales of the euro. It arose on the decreased concerns that the high demand of the US households would boost price growth. As we see more…

Europe: stirring at the bottom

By GG Analyst in Reviews 0 Comment

EUR/USD

We can’t say that yesterday  passed under the banner of the dollar weakening, thus meeting our expectations. Yet despite the news vacuum in the markets the single currency managed to recoup some of its losses after the payroll release on Friday. For the most part of the day EURUSD was hovering around 1.30, but during the US session it made slight gains and had grown to 1.3050 by the end of the day. The stats on Germany’s foreign trade were quite positive, demonstrating a better growth both of exports (which means improvement outside) and imports. Usually, growth of imports is treated 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…