Though James Bullard is not a voting member of the Fed now, he is still concerned with the Committee’s inside. For this reason his comments that FOMC could start increasing the rates earlier than expected by the market stopped the US dollar from falling in the morning yesterday. And then the almost forgotten fear again fell upon the markets, the fear about Europe’s ‘troubled’ countries and their financial sectors. The second largest bank of Portugal aroused particular concerns around its solvency, as Espirito Santo International, a shareholder of Banco Espirito Santo SA, missed short-term debt payments. It immediately stirred concerns about more…
Tag Archives: Sterling
Fed to end QE by October
EUR/USD
As reported in yesterday’s meeting minutes of FOMC, if the US economy maintains the expected growth rate, the Fed will announce the end of QE already in October. It means that at the October meeting the decrease will make 15bln and before that, in July and September, asset purchases will be reduced by 10bln. It is unlikely that the Fed will give up this course for a quicker one because of the strong employment data. It is remarkable that the minutes highlighted concerns about investors’ possible misinterpretation of the risks in the hope that interest rates will remain low for long. more…
USD falls on a quarterly rebalancing
EUR/USD
Yesterday bulls managed to warm up the euro/dollar so much that the pair crossed the 200-day MA. There were even attempts to catch hold of 1.37, yet they proved to be futile as there were no reasons for such a movement. Generally speaking, yesterday’s growth of the pair was more of ‘against’ than of ‘due to’. The German retail sales fell by 0.6% in May instead of growing by 0.8% as expected. That was ignored by the markets this time, though earlier the markets had met the index with anxiety. The preliminary inflation estimate in June proved to be weaker than more…
Degrading US GDP for 1Q
EUR/USD
Yesterday’s data on the US GDP proved to be a real disaster and caused weakening of the US currency. Often the final (third) estimate of the US GDP doesn’t bring any significant changes, but this time the annualized growth rates were considerably revised down to -2.9%. Yet, the expected decline made only 1.8%. A month ago it was reported about the decrease by 1.0% and initially – about growth by 0.1%. Thus, with time the GDP estimate for the first quarter has deteriorated. Many experts, including the Fed’s members, think that it is an extremely retrospective view as it considers a more…
Carney stirred GBP selling
EUR/USD
Yesterday we reported that Monday’s business activity statistics proved to be worse than expected and indicated growth slowdown. Yesterday’s Ifo indicators also fell short of expectations. The Business Climate index has been falling for two months in a row, though even now it is still quite high. What was the euro/dollar’s reaction? None. The single currency continued its attack on the US dollar, going to 1.3627 in the heat of the EU session. Then the pair was affected by caution of the market players, who didn’t hurry to take their profits after hitting a fresh historic high in the US indices. more…