Between Fed’s QE3 and ECB’s LTRO

By GG Analyst in Reviews 0 Comment

EUR/USD

Mariano Rajoy, Prime Minister of Spain, keeps upsetting the markets with his unexpected remarks. Yesterday he kicked the euro from 1.2520 down to 1.2410, pointing out that the country’s banking system is “in an extremely difficult situation”. He also mentioned that joint euro bonds could ease the pressure currently imposed on the Spanish banks. Nevertheless, the aforementioned drop was soon followed by another attempt to go up to 1.25, where the pair found itself earlier today. Yesterday afternoon the markets were full of hope that after the phone conference the G7 finance ministers and leaders of the local CBs would take more…

May the correction start!

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency is appreciating this morning. The correction of extreme oversoldness in the single currency is running its course. EUR/USD has gone above 1.25 at trading in Asia. This long-awaited correction is contributed by a neutral news background. It was a quiet day yesterday and the markets closed it out flat. Today’s correction can be explained by the expectations that the phone conference of G7 financial ministers scheduled for today will lead to some positive shifts towards resolving of the EU crisis. As G7 mainly consists of the countries which handle the slowdown by means of spending increase, Germany will more…

EUR is heading for the lower depths, but who will have the courage to buy it?

By GG Analyst in Reviews 0 Comment

EUR/USD

The ECB calls for politicians to develop a new investment guarantee mechanism at the EU-wide level in order to eliminate an adverse effect, which capital shifts within the region are now producing on some banks. In their turn, the politicians keep emphasizing that the ECB has to take a more active part in bailing out of the troubled countries. While chief officials are shifting responsibility on each other and dictating others what to do, the EU countries keep falling on the domino principle, and the single currency is hitting new lows against the dollar and yen. Yesterday there was an attempt more…

Hope dwindles

By GG Analyst in Reviews 0 Comment

EUR/USD

As seen from yesterday’s rates, hopes that Spain would do without help of the EU were gradually melting away throughout the day. The pair neither bounced on bad news nor flew on an avalanche of triggering stop-orders. However, having started the day from 1.25, the euro/dollar closed it at 1.2370. Again it becomes evident that the single currency suffers the heaviest pressure at trading in America, while sessions in Asia and Europe go on by far more quietly. Yet, even then we don’t observe any significant corrections in the pair. The weak Italian auction with a low bid-to-cover ratio of 1.4 more…

American stocks up, EUR down

By GG Analyst in Reviews 0 Comment

EUR/USD

The ongoing concerns around Spain impede an upward bounce in the euro. Yesterday EUR/USD hit a 2yr low, breaking through 1.25 and reaching the level of 1.2457 at some point. Portugal and Spain are still suffering the capital outflow. The yield spread between these countries’ 10yr bonds and German Bunds exceeds 1000bp for Portugal and 500bp for Spain. The German stocks cost more than their American counterparts (i.e. their yield is lower). This current state of affairs should hardly be attributed to investors’ confidence in the higher growth in Germany against the USA, but can be rather explained by the fact more…