Party’s over, boys! After days of rallying against the dollar, EUR/USD finally showed weakness and capped the day 20 pips below its open price. What the heck dragged on the euro anyway?
It seems that the euro investors weren’t too happy about the region’s retail sales numbers, which showed a 1.2% decline in October when analysts were only expecting a 0.1% downtick. It also didn’t help that the Spanish bond auctions wasn’t successful enough to suggest lower bond yields in the near future.
Will the euro bulls have a chance to get their mojo back today? Aside from the revised GDP report at 11:00 am GMT and Germany’s factory orders at 12:00 pm GMT, traders will be at the edge of their seats for the ECB’s monetary policy decision.
The central bank will publish their December interest rates at 1:45 pm GMT, which will be followed by Super Mario Draghi’s press conference at 2:30 pm GMT. While no one is expecting a change in the bank’s rates, some are looking for downward revisions in growth estimates as well as optimistic remarks regarding the region’s debt crisis.
Don’t even think of missing out on these reports!
The euro extended its decline versus the safe haven dollar yesterday after the European Central Bank (ECB) decided to keep rates on hold and cut next year’s economic outlook. The pair, which started the day at 1.3079, dipped 115 pips and found itself sitting at 1.2964 by the end of the U.S. trading session.
The ECB revealed yesterday that it has downgraded their growth forecast for next year to merely -0.0% to 0.3%. Prior the statement, the growth outlook was between -0.4% and 1.4%. This suggests that the central bank expects the euro zone to contract rather than grow. As for the benchmark interest rate, the central bank opted to keep it unchanged at 0.75%.
The ECB also noted some other issues that it is closely watching such as the resolution of sovereign debt, governance issues in the region, and the fiscal cliff issue in the U.S.
S&P also contributed some bad news. The credit rating agency yesterday announced that it has downgraded Greece’s rating to selective default, which is even lower than CCC. The bond-buying program, according to the agency, “constitutes the launch of what we consider to be a distressed debt restructuring."
On the economic front, the report on German Factory Orders smashed expectations. It showed a 3.9% increase in orders, which was significantly higher than the 0.9% rise the market had initially predicted. It was also much better than the previous reading of -2.4% (already revised up from -3.3%).
No top tier economic data scheduled to be published today but we will see the German Industrial Production report at 11:00 am GMT. It’s anticipated to show a 0.4% decline for the month of October after the 1.8% decrease in September.
It’s a bloodbath out there! No thanks to the better-than-expected U.S. non-farm payrolls, EUR/USD extended its losses last Friday. It started the day at 1.2964 and then dropped to its lowest level in almost three weeks at 1.2877. After that, price pulled back and closed the U.S. trading session at 1.2927.
The only significant economic report released was Germany’s report on industrial production. It showed that production slowed down by 2.6% in October, which was notably worse than the 0.4% decline the market had initially expected. It was also lower than the month prior’s reading of -1.3% (revised up from -1.8%).
No major data today as only the French and Italian production reports are due. They are going to publish at 7:45 am GMT and 9:00 am GMT, respectively.
As for the upcoming days, they are also going to be pretty light in terms of economic data. The only red flag I see on the data cupboard is the ZEW economic sentiment survey. It will come out on Tuesday and it is predicted to show a reading of -11.4, which, if holds, will be a welcome improvement from the previous month’s reading of -15.7.
Do watch out for the release of the manufacturing PMIs of the major economies (France and Germany) of the euro zone on Friday though. Individually, they do not have a strong effect on price action. However, if all of the manufacturing PMIs show better-than-expected results, the positive effect on market sentiment could compound and lead to a rally in EUR/USD.
EUR/USD may have gapped lower over the weekend but this gap was quickly filled as the pair rallied on Monday. The pair started the week at 1.2885 then finished strong at 1.2935. Will it be able to hold on to its gains today?
It’s interesting how the euro was able to make some gains yesterday when euro zone economic data came in the red! For starters, Germany’s trade balance missed the mark and showed a 15.2 billion EUR surplus instead of the projected 15.9 billion EUR reading. French industrial production also came short as it printed a 0.7% increase as opposed to the expected 0.4% uptick. Last but not least, the Sentix investor confidence came in below expectations of a -16.2 reading and registered a -16.8 figure, reflecting weaker financial confidence in the region.
Perhaps the reason why the euro managed to stay afloat is that traders are starting to price in their expectations for the upcoming FOMC statement on Wednesday. Because of that, today’s low-tier economic reports from the euro zone (French jobs data, German wholesale price index, and ZEW economic sentiment) could have minimal impact on the euro’s movement.
The bulls brought their A-game once again yesterday as they managed to extend EUR/USD’s rally for the second straight day. EUR/USD, which began the Asian trading session at 1.2938, closed the day significantly higher at 1.3004.
The better-than-expected ZEW Economic Survey and the positive result Spanish bond auction were the main reasons behind EUR/USD’s flight.
The ZEW Economic Survey printed a reading of 7.6, notably higher than the 0.1 forecast. In addition, Germany’s ZEW survey came in at 6.9, opposite the -11.4 reading the market had initially predicted.
Meanwhile, the Spanish bond auction sold 3.9 billion EUR in debts, more than the 3.5 billion EUR target. This pushed the 12-month bond yield to 2.56% from 2.79%.
No red flags on euro zone’s economic calendar today but we will see the region’s Industrial Production report. It’s projected to show that production increased slightly by 0.3% in October after it had fallen 2.5% in September. Let’s see if the positive forecast will be able to drive EUR/USD higher again today.
Who just celebrated a three-peat victory against the dollar and the yen? The euro bulls did! Thanks to risk appetite and the Fed’s FOMC minutes, EUR/USD shot up by another 77 pips while EUR/JPY flew by 104 pips. Booyah!
The euro bulls started their party early yesterday when Silvio Berlusconi announced that he might withdraw his permiership candidacy if current Italian PM Mario Monti runs as head of a “moderate” coalition in the upcoming elections. Since Berlusconi isn’t exactly the markets’ golden boy, the prospect of his withdrawal sent the euro flying during the early trading sessions.
The Fed became the life of the party in the U.S. session when Fed head Ben Bernanke not only lowered the central bank’s growth forecasts, but also ramped up its stimulus program. The added stimulus sent the high-yielding currencies to new session highs, enough for the euro to cap another positive day.
Will the ECB monthly bulletin at 10:00 am GMT take center stage today? The euro zone’s disappointing industrial production data was largely shrugged off, but I have a feeling that markets will pay closer attention to what the ECB has to say about the economy.
Stay at the edge of your seats for this report, will ya? And while you’re at it, why don’t you keep your eyes peeled for any reports in the U.S. that might weaken the dollar and send its counterparts through the chart roofs?
Talk about resilience! While most currencies were getting their butts kicked by the dollar, the euro managed to hold its ground pretty well. EUR/USD only slipped 6 pips to 1.3075.
From the looks of it, the euro might have been propped up by positive developments in the euro zone. Yesterday, the European Union took a big step towards solving its problems by reaching a deal to make the ECB the region’s banking supervisor. Aside from that, Europe’s finance ministers finally gave the green light to Greece’s much-needed next financial aid payment. It’s now set to get about 49 billion EUR from now until March.
Today, we’ve got a whole bunch of PMI reports coming out, starting at 8:00 am GMT with French manufacturing and services PMIs. Thirty minutes later, Germany will follow up with its own PMIs. And finally, at 9:00 am GMT, we’ll take a look at the euro zone-wide reports. Expect the region’s manufacturing PMI to rise from 46.2 to 46.6, and its services PMI to climb from 46.7 to 47.0.
After that, inflationary data will be available at 10:00 am GMT, although the CPI isn’t expected to move from 2.2%.
There’s no stopping the euro bulls’ drive! The euro was the least of the evils among the major currencies last Friday when domestic concerns in the U.S. and Japan made the common currency more attractive. Heck, the euro gained against the dollar, yen, AND the pound!
Results of French, German, and the euro zone’s PMI reports were mixed in last Friday and Italy’s political drama continued to drag itself out. Fortunately for the euro, investors were more concerned about the U.S. Fiscal Cliff as well as Japan’s weekend elections at the time. As a result, EUR/USD jumped by another 82 pips while EUR/JPY shot 58 pips higher.
But now that U.S. officials are once again hitting the newswires with possible developments and Japan’s Shinzo Abe has won the elections, will we see a buy-the-rumor-sell-the-news scenario for the euro and the rest of the high-yielding currencies?
We’ll have to wait for the next trading sessions to be sure, but for now, keep your eye out for Italy’s trade balance coming up at 10:00 am GMT, followed by the euro zone’s trade numbers at 11:00 am GMT. Last but not the least, ECB’s Mario Draghi is due for a prime time on the spotlight today at 3:30 pm GMT. Watch for any thoughts on Italy’s political scene and possible developments from last weekend’s EU Economic Summit!
Not so fast, euro! After a few days of consecutive gains, the shared currency ended up with a tiny loss against the Greenback yesterday as EUR/USD closed 14 pips below its 1.3174 open price. EUR/JPY also ended the day in the red as it landed at 110.31 after starting the week at 111.20.
As it turns out, Draghi’s positive comments regarding centralized EU banking supervision weren’t enough to keep the euro afloat in yesterday’s trading. The ECB head reassured everyone that having the ECB oversee and regulate the euro zone’s banking sector will be enough to revive confidence in the region’s financial sector and boost interbank lending.
The euro also failed to benefit from the risk rallies which took place after the U.S. Congress revealed that they were on track to come up with a plan for dealing with the looming Fiscal Cliff.
There are no reports due from the euro zone today, which suggests that the euro could be swayed by risk sentiment for the rest of the trading sessions. Be careful out there!
With risk appetite leading the way, the euro continued its rise up the charts, as it edged higher versus the Greenback. EUR/USD rose 59 pips to finish the day at 1.3220. The only question is, can the euro bulls sustain their momentum?
Later today, current account figures will be available at 9:00 am GMT. Word on the street is that the euro zone posted a trade surplus of 5.8 billion EUR last October, up from 0.8 billion EUR the month before. Despite the big jump, I’m not quite sure this will affect euro trading that much.
Instead, I think the one report that could make-or-break the euro bulls’ run today is the German IFO business climate report, which is also due at 9:00 am GMT. Experts are predicting that the index will print at 101.9, which would mark a slight improvement from the 101.4 figure we saw last month. If the report does come in better than expected, it could give the bulls enough juice to push euro pairs even higher.
The euro took advantage of U.S. dollar weakness yesterday as EUR/USD ended the day in the green yet again! EUR/USD opened at 1.3220 then closed 26 pips higher at 1.3246 while EUR/JPY reached a high of 112.50 before closing at 111.80.
Germany’s IFO business climate report came in stronger than expected for December as the reading climbed from 101.4 to 102.4, outpacing the consensus at 101.9. This reflects a strong improvement in business conditions in euro zone’s largest economy as the index chalked up its second monthly increase.
Another factor that boosted EUR/USD yesterday was news that the U.S. Fiscal Cliff talks once again reached a stalemate as the White House announced that it wouldn’t accept the Republicans’ proposed plans. Bear in mind that the deadline is fast approaching and that the U.S. might be teetering close to a default!
Only medium-tier report reports such as the German PPI, Belgium business climate, and euro zone consumer confidence are set for release today. With that, make sure you keep an eye out for any updates on the Fiscal Cliff situation to figure out whether the euro has another chance to outshine the dollar or not!
EUR/USD climbed to as high as 1.3296 and dipped to as low as 1.3189, but at the end of the day, the pair finished just 5 pips below its open price at 1.3241. Likewise, EUR/JPY traded above 112.00 and below 111.00, but it ended the day virtually unchanged at 111.89. Can we expect the euro to change things up today?
Yesterday was pretty uneventful since the euro zone didn’t release and headliners. The German PPI came in just as expected to show a 0.1% decline. Meanwhile, consumer confidence in the region remained unchanged as the index printed a reading of -27.
Since the euro didn’t really budge yesterday, the question now is whether the market plans to boogie before the holidays! Remember, most markets will be closed next week so today may be our last chance to see volatile moves.
If today’s GfK consumer climate index (slated to stay at 5.9) prints wildly off forecasts, it might help spur some movement on euro pairs. It’s your last chance to catch a euro zone report before the holidays, so tune in at 7:00 am GMT!
The euro’s attempts to breach the 1.3300 handle have gone in vain as my efforts had been in avoiding my Momma’s famous homemade eggnog. After strongly rallying past 1.3100, EUR/USD has spent the most recent trading days around 1.3200, falling short of trading past 1.3300.
Over the break, we’ve heard mixed news for the euro. On the not-so-good side of things, Italy ended the year with disappointing bond auctions as the general elections loom. The Treasury was only able to raise 5.88 billion EUR from its 5- and 10-year bonds, falling short of its 6 billion EUR target. It also had to pay higher borrowing costs, with interest rates on 10-year bonds up at 4.48% from 4.45% in November.
Chancellor Angela Merkel was also a tad bit pessimistic in her speech, warning that the euro zone could face bigger economic challenges this year. However, she did remark that reforms set in place to address the crisis have started to take effect.
For today, the euro’s price action will probably be dictated by two factors: economic data and the U.S. fiscal cliff.
At 8:15 am GMT and 8:45 pm GMT, the Spanish manufacturing PMI (forecast is at 44.9) and Italian manufacturing PMI (45.4) for December will be released, respectively. The region-wide PMI will then be on tap at 9:00 am GMT with the forecast at 46.3.
In regard to the U.S. fiscal cliff, you should know that American policymakers were able to pass the deal just before the cuts and taxes took action. The issue has been in the headlines since last year and the news could move markets as traders come back from their holiday break.
No break of 1.3300 to start the year! After launching high to test the major psychological handle, EUR/USD came tumbling back down, erasing all of its gains and ending the day 11 pips lower at 1.3176. Will it give this major resistance level another shot or can we expect more losses from the euro?
We got some mixed reports from the euro zone yesterday, with the Spanish manufacturing PMI printing below expectations (44.6 vs. 44.9) and the Italian manufacturing PMI exceeding expectations (46.7 vs. 45.4). Meanwhile, the region-wide version of the report ticked down to 46.1 instead of staying at 46.3 as many had anticipated.
If you’re looking to trade the euro today, I suggest you tune in for the release of Spanish (8:00 am GMT) and German employment data (8:55 am GMT). The number of unemployed individuals in Spain is expected to increase by 50,300 (up from 74,300). On the other hand, Germany is predicted to see a rise of 11,000 unemployed workers, which is more than double the figure it saw the month before.
Y’all know the drill – if these reports print ugly figures, look for the markets to dump the euro!
Yowza! The euro extended its losing streak against the dollar as EUR/USD closed below the 1.3100 handle yesterday. EUR/JPY had its share of losses as it found resistance at 115.00 and ended the day at 113.86. What triggered this euro selloff?
Medium-tier reports from the euro zone came in stronger-than-expected yesterday as both German and Spanish employment figures beat expectations. Although these kept the euro afloat for a while, risk sentiment took a turn for the worse when the FOMC meeting minutes revealed that Fed officials couldn’t see eye to eye regarding the duration of their bond purchases.
Another round of medium-tier reports is scheduled for the euro zone today as Germany will print its retail sales figure while Spain and Italy will release their services PMIs. The main event for today though is the release of the U.S. NFP figure for December at 2:30 pm GMT. Forex Gump has some tips on trading EUR/USD for the NFP release so y’all better check it out!
Phew, that was close one! After its terrible performance the day before, EUR/USD managed to stay afloat last Friday. The pair began the day at 1.3062, fell to 1.2998 during the day, and then closed the 10 pips higher at 1.3072.
The economic docket last Friday was filled with positive reports, which helped EUR/USD recover some of its losses.
In the euro zone, for instance, the German retail sales came in better than expected. German retail sales for November increased 1.2% month-on-month, much higher than the 0.9% rise the market had initially predicted. Meanwhile, euro zone’s services PMI remained steady at 47.8.
In the U.S., the non-farm payrolls showed that 155,000 net jobs were created in December. It was a slight improvement from the 150,000 forecast. Average hourly earnings was also a delight as it showed a 0.3% increase versus the 0.2% consensus.
The week won’t be heavy in terms of economic data but that doesn’t mean we won’t see any action. On Thursday, the European Central Bank (ECB) will meet again to decide to interest rates. The market projects that the ECB will keep rates unchanged at 0.75% and hold off on any easing measures.
After trading as low as 1.3016, EUR/USD rallied late and managed to finish at 1.3113, up a decent 31 pips on the day. Could we see more euro strength in today’s matchups?
The euro got a slight boost from news that the Basel Committee for Banking Supervision was a little less stringent on its Liquidity Coverage Ratio. The committee decided to lower the required liquidity ratio and push back the implementation date to 2019. This helped boost risk sentiment slightly, allowing higher yielding currencies like the euro to climb up the charts.
For today, we’ve got a couple of second tier reports headed our way.
First up are the euro zone retail sales and unemployment rate figures 10:00 am GMT. Retail sales growth is being pegged at 0.3%, which would mark a decent turnaround from the -0.1% drop we saw in November. Meanwhile, euro zone unemployment is projected to have ticked up slightly from 11.7% to 11.8%.
Later on at 11:00 am GMT, Germany factory orders will be available to the public. Word on the street is that demand dropped in December by 1.4.%, after orders rose by 3.9% in November.
If these reports come in worse than projected, we may just see the euro give back all of its Monday’s gains!
Just like Taylor Swift, it seems like the euro found itself heartbroken in yesterday’s trading. EUR/USD traded well above the 1.3100 handle during the Tokyo and London sessions but dropped below the psychological level during the New York session. It finished the day 29 pips lower at 1.3083.
The dismal roster of reports from the euro zone might have given buyers enough reason to fall out of love for the currency.
The region’s unemployment rate for November rose by 0.1% to 11.8%, just as expected. On the other hand, the euro zone’s retail sales and Germany’s factory orders fell short of forecasts. Consumer spending posted a very dismal 0.1% uptick during the month and disappointed the market consensus for a 0.3% growth while factory orders from Germany printed a bigger contraction of 1.8% than the 1.4% decline that analysts predicted.
Today, a couple of reports will be on tap for the euro. Should they fail to impress markets, I wouldn’t be surprised to see the currency extend its losses and neither should you.
At 10:00 am GMT, the final reading of the region’s GDP for Q3 2012 will be released and no changes are anticipated from its previous reading of -0.1%. Then at 11:00 am GMT, the German industrial production report is seen to print a 1.1% uptick.
With no major data on the docket, the euro’s price action was as mixed as a bag of jellybeans. The common currency dropped for a second day in a row against the Greenback, while it gained on the yen and steadied against the pound.
Aside from the strong U.S. earnings reports, the upcoming ECB interest rate decision might have something to do with EUR/USD’s weakness. Though market geeks aren’t expecting any changes in the ECB’s policies, some are still wary that Draghi might announce a game changer in his press conference following the interest rate decision.
Remember that last month Draghi weighed on the euro when he downgraded the euro zone’s growth projections and even hinted at a rate cut. Bond yields have fallen significantly and economic reports have exceeded expectations since then, but the possibility of a wildcard announcement is enough to make the euro investors skittish.
If you think that Super Mario Draghi will inspire fireworks in the markets today, then you should wait for his press conference around 2:30 pm GMT, which comes right after the ECB’s interest rate decision at 1:45 pm GMT.
Good luck trading today, kiddos!
And the euro levels up! Thanks to Super Mario the euro was able to finish the day higher against most of its counterparts. EUR/USD was up more than 200 pips higher from its opening price at 1.3271. Meanwhile, EUR/JPY ended the day at 117.77 from 114.83.
ECB President Mario Draghi didn’t announce a rate hike. But, neither did he make any mention of a rate cut and that was enough to boost the euro. Markets had braced for the central bank to talk about more rate cuts for the year. It also helped the euro that Spain’s bond auction turned out to be a big success. The government was able to sell 5.5 billion worth of bonds with interest rates falling from 4.797% to 4.033%.
Don’t think that it was all good in the ECB hood though. The central bank warned that economic growth would be weak at the start of the year but would gradually improve.
Perhaps the main takeaway from the rate statement is that the ECB is happy with the improvements in the financial markets but still sees slower economic growth.
Today our forex calendar is blank for reports from the euro zone. So don’t be surprised to see the positive vibes from the rate statement.