August 5, 2011
Eur[o] going dooown! No thanks to the ECB’s statements yesterday and the persistence of risk aversion in markets, the euro fell sharply against its major counterparts. EUR/USD dropped by a solid 206 pips to 1.4122, while EUR/CHF also fell by 175 pips. Meanwhile, the BOJ’s currency intervention dragged EUR/JPY to an intraday high of 114.18.
Too bad the euro bulls didn’t have a chance! Though Germany printed a better-than-expected factory orders data, the ECB’s interest rate statement and press conference blocked out the optimism that the region would recover from its debt crisis anytime soon.
Aside from holding its interest rate steady at 1.50%, the ECB announced its plans to buy more bonds from financially-troubled euro zone nations. What’s more, the ECB also acknowledged that economic uncertainty had increased over the last few weeks. I don’t know about you, but those statements have “dovish” printed all over them!
Let’s see if the euro manages to trim some of its losses today when Italy releases its GDP report at 9:00 am GMT, which will be followed by Germany’s industrial production report at 10:00 am GMT. Of course, we all know that the markets will pay special attention to the U.S. NFP report coming out at 12:30 pm GMT, so y’all better watch out for it! If the report sparks a heavy round of risk aversion, then we just might see the euro fall deeper in the charts!
Last edited by PipDiddy; 08-04-2011 at 11:04 PM.
"The only cable I watch is the pound baby."