EUR &GBP: cautiously awaiting statistics

EUR/USD

Yesterday the single currency went as high as 1.3878. The bears, who had put pressure on the currency earlier in the day, were punished, but the higher movement could already be provoked only by serious reasons. There weren’t any, so trading stabilized at the neutral 1.3850. Market players behave quite cautiously now in anticipation of piles of  important statistics on Europe and the USA. Regarding trends, inflation data will be of utmost importance for the single currency. Tomorrow we expect the Preliminary EU CPI for April, and today we will get inflation statistics on the German Lands, which may also affect more…

EUR to find strong buyers

EUR/USD

Yesterday ECB President Mario Draghi made a speech devoted to CBs’ communication during the period of crisis. It is very symbolic since the market feels difficulty with discerning the ECB’s signals. We constantly hear about a wide range of tools, which can be applied in case of need. In the meantime, inflation has slowed down to the lowest rates since 2009 and it is on assumption that, as opposed to that time, a year before the inflation rates were not increased. So, deflation forces are obvious. Yet, it is also obvious that the Committee members are at variance about the necessity more…

Ready to retrace

EUR/USD

The euro/dollar keeps growing and has already risen close to 1.3900. The dollar demand has been less strong this week, which is partly a result of the lower interest in the US stocks and partly – of the realization that the ECB won’t move in the direction of new incentives, while the EU economy is improving. Regarding stocks, we can see the growing confidence of investors in the inevitability of a retracement in the near future. Besides, lately the core indexes feel difficulty with growth and are trading flat, while volatility indexes have declined to the levels, speaking about a possible more…

USD falls into a nosedive

EUR/USD

The risk demand showed up where no one expected it. We had thought that the meeting minutes would be tougher, but the reality proved to be quite different. FOMC is trying to move off Bernanke’s sharp limits which could become a guideline for the markets, when the Fed will raise the rate. Strictly speaking, it is not a sign of the extra-soft policy, but still doesn’t let us speak about its toughening. Thanks to it the US stock markets grew by more than a percent and the dollar got weaker across the board (except for the yen). EURUSD rose to 1.3870, more…

Draghi did the right thing

EUR/USD

Fortunately we were mistaken about Draghi yesterday. His comments on the rate decision and answers to journalists’ questions made it clear that the ECB is ready for action. As opposed to the press-conference in March, Draghi didn’t sound optimistic. On the contrary he pointed out that the inflation slowdown proved to be an unpleasant surprise for the Committee and said that deflation or even a long period of low inflation is a very dangerous thing, which the Bank is going to combat. He added that various unconventional measures  (expansion of the ECB’s balance sheet via asset purchases, rate cuts and even more…