Santa is Draghi

By GG Analyst in Reviews 0 Comment

EUR/USD

Wanted important news?  Here it is. Yesterday Mario Draghi sparked off the rally on stock markets by the announcement about issuing three-year loans on bonds of troubled countries to banks. Now large hedge funds are placing their stakes on the new kind of carry trade: borrow money at a 1% interest from the ECB and purchase “risky” bonds. As a result the euro has started to grow from 1.30 and is now trading above 1.31. It looks like a significant shift after several sessions of listless trading. On this news yield on three-month Spanish bills has collapsed from 5.11% to 1.74%. more…

In the absence of big news currencies are trading around key levels

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency continues fluctuating in a narrow range. While there is no news the euro holds close to 1.30 as market participants are unwilling to trade without new signals. The interview of the ECB’s President Mario Draghi to the FT and his yesterday’s speech reaffirmed that the Bank refuses to make significant purchases of troubled countries’ bonds, but at the same time is going to take certain measures to maintain the Eurozone’s integrity. On the whole this should be perceived as readiness of strong regional economies to increase their contribution to the bailout of troubled countries in order to get more…

Market Consolidation After a Stormy Week

By GG Analyst in Reviews 0 Comment

EUR/USD

Euro-bulls are consolidating their forces to close the week above 1.30. And there is some reason to believe that they will succeed. However this is unlikely to change the situation much. This week’s sales of the single currency are regarded as the biggest for the last three months; they have brought the euro to its lowest level since the beginning of the year. After a powerful move from 1.3380 to 1.2950 market participants need time to take a breath. Bargain hunters appeared in the market a day earlier than expected. Yesterday the euro managed to get over 1.30 and is now more…

That’s all, Folks!

By GG Analyst in Reviews 0 Comment

EUR/USD

On Monday the euro fell below 1.32 due to the investors’ disappointment in the EU summit. Problems haven’t been solved; all we have now are just pledges to consider a closer fiscal union in half a year – an eternity for a debt crisis! EURUSD is now at 1.3170. It was at 1.3370 at the beginning of Monday’s trading. Moreover, the received comments have once again proved that Germany is not very willing to accept current terms. The fact is that Bundesbank can issue a loan to the IMF only when given the consent of legislators. As follows from the previous more…

Draghi dragged the euro down

By GG Analyst in Reviews 0 Comment

EUR/USD

Mr. Draghi bitterly disappointed the financial world on Thursday. Yes, the key interest rates were lowered by a quarter of a point to 1 percent. But, alas, there’s no “shock and awe” over the troubled countries’ bond purchases. There hasn’t been even a single attempt to play with the laws and find some loophole. ECB is perseveringly sticking to its guns: “We have a treaty and Article 123 prohibits financing of governments. It embodies the best tradition of the Bundesbank. We shouldn’t try to circumvent the spirit of the treaty.” After that statement markets immediately went down and the demand for more…