In focus: European CPI and US employment

By GG Analyst in Reviews 0 Comment

EUR/USD

Last week the euro was under such a strong pressure that even on Friday EURUSD couldn’t escape falling to fresh local lows. The pair sank to 1.3700, which hasn’t been seen since late February. This can be explained by the short-term flight to dollars for portfolio rebalancing, so traditional for the end of the month/quarter. The forces which further came in effect were less powerful, but they were enough for rehabilitation of the single currency. In the afternoon the pair rose to 1.3770 and closed the week at 1.3750. Today is the last trading day of the quarter, so the dollar more…

Closing short positions in commodity currencies

By GG Analyst in Reviews 0 Comment

EUR/USD

The euro is still under pressure. The support at 1.3750/60, which had been strong at the beginning of the week, was surrendered by the bulls yesterday. By the way, similar performance is observed in the US stock markets. They are sagging under the burden of rate-increase expectations. However, the dollar cannot start a real rally as there is no unanimity in the FOMC. Evans, for example, expects a rate increase in the second half of 2015.  It somehow contradicts the core market forecast, according to which the rates will be raised in the first half. The dollar is depreciating against the more…

ECB is ready for unconventional steps, but will hardly take them

By GG Analyst in Reviews 0 Comment

EUR/USD

ECB is ready to take measures not to let the period of extremely low inflation continue. We keep getting messages regarding this. Liikanen, mentioned yesterday, again spoke about possible introduction of negative interest rates to punish the banks, which park money at ECB and don’t issue loans to business and households. Draghi also didn’t specify anything yesterday, promising to ‘do whatever it takes to ensure price stability’. It’s important that Draghi and even Germany’s Weidmann mentioned quantity easing and negative interest rates among the considered measures. The market has already heard something like that before and it’s been long observed that more…

Steel nerves of US investors

By GG Analyst in Reviews 0 Comment

EUR/USD

The pressure didn’t weigh on the markets for long. There is a strong feeling that there is little that can distract investors from buying the US stocks: neither overbought markets, nor geopolitical troubles in Europe, nor bringing of the Fed’s rate increase closer by half a year. The decline of the US stock indices caused by Yellen’s comments on Wednesday was bought out yesterday and by now we’ve returned to the same positions as last week and are generally in the area of record highs. Anyway, we can’t say the same about the euro/dollar. Yesterday purchasing of dollars against the EU more…

FOMC is braver than expected

By GG Analyst in Reviews 0 Comment

EUR/USD

The Fed’s commentary provoked strengthening of the US dollar. Purchasing was caused mostly by the increased intention to raise the rate next year. It is not stated in the published forecasts, but observers have figured out that these forecasts speak about a possibility of the rate increase approximately in the middle of the next year. If actual and forecasted data differ significantly, the QE3 programme may be brought to a close already this year. Yesterday’s cut, as expected, made 10bln dollars. Besides, FOMC chose not to peg interest rates to the unemployment rate, but consider a wider range of indicators. Apparently more…