Short covering in EUR before Bernanke’s speech

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency was on the decline yesterday morning, but the news from the USA once again reminded us that the situation across the Atlantic is also rather gloomy. The pressure over the euro has been provoking the change of the interest rate differential after the ECB cut the rate down to 0.75% at the beginning of the month. That made the euro one of the weakest currencies, forcing it to fall against most of its competitors. Most likely, the decline in the euro/dollar from 1.2260 down to 1.2175 in the morning hours yesterday was caused not so much by the more…

Is there another false surge of optimism ahead?

By GG Analyst in Reviews 0 Comment

EUR/USD

Today is the second day of the EU summit. This means that today we should expect comments concerning the progress made to resolve the sovereign and banking crisis. For the most part of the day yesterday the market was lifeless and the trade volumes in Forex were very low. During the US session speculators attempted to push the rate below Tuesday’s low (1.2441). However, the attempt failed. During the Asian session today it was attempted to drive the pair in the opposite direction. Apparently, it is the work of the Japanese funds and traders, as the demand for risky assets last more…

Trying to ride the tide

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency dropped below 1.25 for the first time in two weeks. Formally, the worsening of market sentiments was caused by the audacity of the Greek coalition. Many expected that the “pro-european” winning parties would support the austerity policy, imposed by the EU, but instead the Greeks decided to ride the wave. This wave was heaved by France’s new President Hollande and soon was supported by the Prime Ministers of Italy and Spain. We are talking about concentration on the growth instead of the austerity. Yesterday the Greek parliament eagerly discussed the postponement of the budget consolidation for 2 more…

USD again gains strength on bad news from the USA

By GG Analyst in Reviews 0 Comment

EUR/USD

The negative sentiments in regard to the USA can cause both decrease and increase in the dollar. It depends just on how much bad news is released. If there isn’t much negative, the CB and the government are expected to handle this by making monetary or fiscal policy less tough. However, if the market believes that the slowdown will spread to other economies and require more money infusions (meaning that it will lead to the increase in the deficit budget), the negative news from the USA can be of benefit to the dollar. The market simply considers that in other countries more…

Back to 2009?

By GG Analyst in Reviews 0 Comment

EUR/USD

The miracle that was awaited by many hasn’t happen. The utterly poor EU Prelim PMI figures that came in yesterday morning deeply upset the market participants. Yet unfortunately it was not the only bad news of the day.  According to the Markit PMI data for Germany, the affairs of the local manufacturers are now at their worst since summer 2009. The preliminary PMI figure for June dropped down to just 44.7. France and Euro-Zone in general feel a bit better then forecasted. But we believe that they won’t be able to show better dynamics than Germany for any significant space of more…