Another day in the red? What’s new?! The euro lost ground against the Greenback and the Japanese yen as EUR/USD ended the day at 1.2286 while EUR/JPY closed at 96.90. Will the euro have a chance to bounce back today?
Even though the euro zone didn’t release any economic data yesterday, the euro was sold off heavily thanks to news reports showing that Greece might need an extension of their ongoing austerity program The report revealed that the debt-ridden nation might miss its deficit targets AGAIN and that they’d need more time to come up with the 11.5 billion EUR in spending cuts. Better keep your eyes and ears peeled for any updates since the Greek Prime Minister is scheduled to meet with Merkel, Hollande, and Juncker to discuss their options next week.
Another factor that probably triggered the euro’s selloff yesterday was the rumor that the SNB was already starting to diversify out of their euro holdings. After all, holding on to their EUR/CHF has proven to be expensive for the central bank and they might be thinking of accumulating reserves in other currencies instead. Although these are nothing more than rumors for now, stay on your toes in case the SNB confirms these plans!
The euro zone is set to release its CPI figures for July at 9:00 am GMT today. The headline figure is expected to show a 2.4% annualized increase while the core figure could post a 1.7% yearly rise. Don’t forget that the U.S. is also set to print a few high-profile reports, namely its building permits, housing starts, and Philly Fed index.
Take note that the U.S. dollar has been reacting to fundamentals lately, which means that weaker than expected U.S. data could trigger a dollar selloff and be positive for the euro… Unless the euro zone comes up with another set of bad news, that is!
Finally, a bit of activity! In its biggest move this week, the euro gained 69 pips against the dollar as EUR/USD rallied from its opening price of 1.2286 to end the day at 1.2355. Let’s see if it can end the week on a strong note!
No surprises from yesterday’s CPI releases… As a matter of fact, economists were right on the money with their forecasts as headline CPI held steady at 2.4% while core CPI ticked up from 1.6% to 1.7%.
Will today’s reports match forecasts too? At 6:00 am GMT, the German PPI will be released. Look for it to reverse the 0.4% decline in June with a 0.4% uptick in July. Then at 8:00 am GMT, current account data will be available. According to economic gurus, we can expect the euro zone’s surplus to narrow from 10.9 billion EUR to 7.8 billion EUR.
To round up the euro zone releases at 9:00 am GMT, we’ll be treated to the June trade balance report, which is slated to show a slimmer surplus of 5.4 billion EUR, down from 6.3 billion EUR.
Now, these reports may not have much of an impact on the markets individually, but if they all print similar results (for example, all better than expected), it may lead to a strong move on euro pairs.
Fall back, fall back! Euro bulls retreated from resistance around the week’s highs on Friday. EUR/USD tapped an intraday high of 1.2383 before plunging to 1.2289. By the end of the New York session, the pair had settled at 1.2334, 21 pips below its opening price.
Market junkies say that the lack of developments regarding the European debt crisis as well as the better-than-expected U.S. data might have sparked a wave of dollar-buying, causing the euro its demise. Heck, not even positive current account and trade balance reports from the euro zone were enough to keep the shared currency afloat.
The euro zone reported its biggest account surplus on record last Friday at 10.9 billion EUR for June and topped the consensus for a 7.8 billion EUR reading. Meanwhile, the trade balance report for the same month came in almost twice the forecast (5.4 billion EUR) at 10.5 billion EUR.
Our forex calendar is blank for reports from the region today. With that said, don’t be surprised to see limited action on EUR pairs. If you’re looking to trade the currency, it would be a good idea to keep an ear out for updates regarding the debt crisis from the euro zone and gauge market sentiment.
The euro just can’t catch a break, can it? Even though the markets were unusually inactive, the euro still couldn’t muster the strength to end the day in the green. It slipped 12 pips against the dollar while retreating 19 pips against the yen. Bummer, dude!
What made headlines up in Europe were reports that the ECB may be considering the use of yield caps on certain government bonds in the euro zone. Basically, with the use of yield caps, the central bank will be telling the markets that it won’t allow bond yields to rise past a certain point. I guess you can say it works similarly to the EUR/CHF cap that the SNB implemented!
If the ECB can somehow push through with yield caps, it could finally put a halt to the region’s rising borrowing costs. But remember, these are just rumors for now! Y’all shouldn’t celebrate until things are official, fellas!
No reports on the economic calendar today, but stay on your toes for further surprise developments and rumors in the euro zone.
Thanks to renewed rumors of action by the ECB, the euro lit up the markets Vito Corleone-style! EUR/USD rose 115 pips to finish at 1.2464, while EUR/JPY closed at 98.76, up a solid 71 pips on the day.
Rumors circulated the markets that German officials would not oppose of the ECB’s proposal to implement a bond purchase program that would effectively cap yields from rising further. This means that yields on Spanish or Italian bonds would be capped and in effect, make it cheaper for those countries to issue debt.
Naturally, this eased concerns about the state of the European debt crisis, allowing the euro to soar up the charts.
No biggies on the docket again today, but if we’ve learned anything from yesterday, it’s that you ALWAYS have to pay attention. You never know what news might hit the airwaves!
EUR/USD had traded sideways for the majority of Asian and European trading session but suddenly burst into life when the FOMC meeting minutes came out. EUR/USD, which had started the day 1.2564, ended the U.S. trading session 58 pips higher at 1.2522.
The FOMC meeting minutes showed that many voting members believed that additional easing would be likely needed soon unless there is a significant improvement in the economy. It was a sharp contrast to June’s minutes where only a few members saw the need for further easing.
No news reports were released from the euro zone yesterday but we’ve got a couple of important PMIs scheduled to be published. They will begin coming in at 7:00 am GMT. The first PMI reading will be from France, then from Germany, then from the entire euro zone. If the PMIs beat forecast, EUR/USD will probably continue its rally.
Way to go, euro! For the third trading day in a row, the euro bulls beat the bears as they pushed EUR/USD higher in the charts. Should they thank the euro zone’s economic reports, or the QE3 speculations in markets?
Judging by the euro’s price action, it seems that the euro bulls owe their luck to both. The German, French, and the euro zone’s manufacturing and services PMIs mostly came out better-than-expected, which helped fuel the euro rally. Of course, it didn’t hurt that the U.S. printed disappointing figures that increased speculations that the Fed would pull the trigger on the QE3 program!
Only Belgium’s NBB business climate report at 1:00 pm GMT is slated to come out of the region today, so you might want to watch the newswires for any speeches made by the euro zone officials. Who knows? Maybe we’ll get more word about a possible Spanish bailout, or Merkel’s support for the euro. Just remember to stick to your trading plan, aight?
Oh snap, did the euro just break its winning streak against the Greenback? While the common currency barely moved against the pound and the yen, EUR/USD finished the day 50 pips lower than its open price. What gives?
No major reports were released from the euro region aside from Belgium’s business climate data, so the euro’s price action was vulnerable to noise in the markets.
EUR/USD fell in the early trading sessions when the market bees buzzed about how Germany is preparing for a temporary Grexit. The euro was only able to recoup some of its losses in the later trading sessions when Big Ben Bernanke defended the use of QE to prop up Uncle Sam to a House Member. Talk about news trading!
Only Germany’s import prices at 6:00 am GMT and the German IfO business climate at 8:00 am GMT are up on the docket today, so make sure you pay attention to any speeches by the euro zone officials!
Good luck trading this week, homies!
Not today, boys! For the second trading day in a row the euro bears outmuscled the bulls as a disappointing German report got mixed in with risk aversion in markets. EUR/USD settled with a 15-pip drop after hitting an intraday high at 1.2537.
With Germany’s IfO business climate clocking in at falling to its lowest level since March 2010, who could blame the euro bears for shorting? The data came in at a 102.7 when analysts had priced in a 102.3 reading.
Of course, it also didn’t help that market players are starting to lose excitement over the ECB’s supposed bond-buying program. Word on the hood is that nothing will be finalized until the German High Court publishes its decision on the ESM around mid-September.
Last but not the least, the euro took a hit from traders who are starting to believe that the Fed won’t be signalling a QE3 program in the Jackson Hole meeting after all. Uh-oh.
Only the GfK consumer climate at 6:00 am GMT and the money supply and private loans data at 8:00 am GMT are scheduled for release today, so you might want to stay glued to the tube in case we hear more details from the euro zone or even the Fed officials regarding their stimulus plans.
Good luck trading today, homies!
Redemption was the name of the game for the euro yesterday (not in the same way that Metta World Peace changed his name to Military Industrial Complex). EUR/USD skyrocketed higher to end the day 69 pips above its opening price at 1.2568. Meanwhile, after EUR/JPY bottomed at 97.89, it rallied higher to close the day at 98.69.
Spanish and Italian bond auctions went smoothly yesterday and might have helped the euro. However, some market junkies say that euro bulls had ECB President Mario Draghi to thank for their run. The central bank made an official announcement yesterday that the ECB head honcho, along with the rest of the ECB executive board, won’t be able to make it to the Jackson Hole Symposium this weekend due to a heavy work load.
Consequently, the news got everyone excited! Investors now have their hopes up that the ECB would announce big plans when it makes its monetary policy announcement next Thursday. Now, all we gotta do is wait and see if the bank could deliver.
Until then, we should be on our toes for economic reports. Our forex calendar only has the German preliminary CPI (scheduled at 12:00 pm GMT) on tap for the euro and it is eyed to come in at 0.1%. But on the other side of the Atlantic, the U.S. will be releasing its preliminary GDP report which will probably affect price action later in the New York session.
After its stellar performance on Tuesday, EUR/USD failed to impress and simply moved ever-so-slowly down the charts yesterday. The pair ended the day at 1.2530, 38 pips lower from its opening price. It seems that market participants are choosing to sit on the sidelines ahead of the Jackson Hole Summit on Friday.
There wasn’t much in terms of data, as only the German Preliminary Consumer Price Index was released. It showed that the inflation rate was at 0.3%, slightly higher than the 0.1% the market had initially expected. Last month, it was at 0.4%.
Today, we’ve got more data from Germany. At 7:55 am GMT, the country’s unemployment change will be published. It’s projected to show that the number of unemployed people rose by 7,000, the same amount it increased last month. The report normally has a positive correlation with price action – better-than-expected results usually lead to a rally in EUR/USD.
The Italian 10-year bond auction will also take place. If it performs as well as the Spanish bond auction two days ago, EUR/USD could find a lot of support again.
In any case, let’s wait and see how the upcoming events actually affect EUR/USD.
Just like the reality TV show Jersey Shore, the euro got axed in yesterday’s trading too. EUR/USD once again failed to rally past resistance at 1.2550, finishing the day 22 pips below its opening price at 1.2508. We also saw a similar price action on EUR/JPY with the pair closing with a 23-pip loss at 98.37.
What caused the euro to trade lower? A LOT.
For one, risk aversion kicked in as traders braced themselves for the Jackson Hole Symposium. On top of that, Spanish bond yields once again crept higher. The IMF also didn’t help when it released a statement saying that Greece will have a hard time implementing austerity measures.
Of course, it also did bode well for the euro that the German unemployment change report came in higher than expected. Data for July showed that the number of unemployed individuals were up at 9,000, 2,000 more people than what analysts had braced for.
Today’s the first day of the much-anticipated Jackson Hole Symposium. Make sure you keep an ear out for updates, especially on QE3 from Fed officials as they could affect price action on EUR/USD.
There are also a couple of reports from Europe on the docket today. Although they’re only considered third-tier reports, you still should pay attention to them! Who knows, they may give investors more reasons to buy (or sell) the euro in today’s trading.
At 6:00 am GMT, Germany’s retail sales report for July is anticipated to come in at 0.2%. Then at 9:00 am GMT, the CPI flash estimate for the euro zone for August is seen at 2.5% while the region’s unemployment rate has been predicted to print at 11.3%.
EUR/USD finished the week on a good note last Friday, thanks to more reports indicating that the ECB is considering flexible yield targets for shorter-maturity bonds. The pair also received a lot of support from comments by Chinese Premier Wen Jiabao who said that the Chinese government is willing to put money in Europe’s bond market.
Economic data from the region were also positive. The euro zone CPI flash estimate came in at 2.6%, slightly higher than the 2.5% forecast and the previous month’s 2.4%. Meanwhile, the euro zone unemployment rate was at 11.3%, just as expected.
This week will be a big one for the euro as an overabundance of economic events is scheduled to happen. Here’s a list of them with the most important ones in bold.
[ul]
[li]Monday: Spanish Manufacturing PMI (7:15 am GMT), Italian Manufacturing PMI (7:45 am GMT), and euro zone Manufacturing PMI (8:00 am GMT)[/li][li]Tuesday: Spanish Unemployment Change (7:00 am GMT)[/li][li]Wednesday: Euro zone Retail Sales (9:00 am GMT)[/li][li][B]Thursday: ECB Interest Rate Decision (11:45 am GMT)[/B][/li][li][B]Friday: German Industrial Production (10:00 am GMT)[/B][/li][/ul]
In addition to these events, also watch out for the U.S. non-farm payrolls. It’ll be released on Friday! Even though it’s a U.S. report, it’s a major market mover that has a strong impact on most, if not all, currencies.
Super Mario does it again! While traders were still processing the weak PMI reports from the euro zone, Mario Draghi’s said a comment or two that boosted EUR/USD by another 28 pips. What the heck did Draghi say?
In a closed-door parliamentary session in Brussels, ECB head Mario Draghi stated that buying bonds with maturities up to three years does not qualify as state financing and is still within the ECB’s mandate. If you recall, market players are expecting the ECB to announce some form of bond-buying program this Thursday when the central bank announces its interest rate decisions.
It might have also helped the common currency that the euro zone’s PMI data had mixed results. While Italy and the euro zone’s manufacturing numbers were a bit weaker than their previous readings, Spain’s data surprised to the upside with a reading of 44.0 after showing a 42.3 reading in July.
Spain’s employment numbers are due at 7:00 am GMT today, followed by the euro zone’s PPI report at 9:00 am GMT. If you’re not planning to trade these reports, then you better keep an eye out for any other comments or statements that might give clues on the ECB’s plans for Thursday!
It seems few traders were willing to hold on to euros with the big ECB rate decision now just a day away. As a result, EUR/USD erased its gains from Monday, ending the day 29 pips lower at 1.2564.
It didn’t help that yesterday’s Spanish unemployment report came in much worse than expected. Spain, which suffers from a painfully high unemployment rate of 24.6%, saw the number of unemployed people seeking work rise by 38,200 in August, instead of falling by 27,800. Now, unemployment is at a 5-month high!
Today, we’ll take a good look at how the services sector is doing in the euro zone. At 7:15 am GMT, Spain is due to roll out its services PMI, which last printed a reading of 43.7. Then at 7:45 am GMT, Italy will follow up with its own version of the index, which is expected to rise from 43.0 to 43.3. To round up the PMIs, the euro zone-wide edition will be released at 8:00 am GMT. Expect it to print a reading of 47.5 once again, homies!
However, if you’re looking for numbers with more oomph, the retail sales report (due 9:00 am GMT) might do the trick. It’s slated to show a 0.2% decline in sales after revealing a 0.2% uptick in June. Should this report print worse-than-expected results, the euro could come under more selling pressure.
The euro does it again! Thanks to speculation of ECB bond purchases and risk appetite in the markets, the euro ended the day higher against its counterparts. EUR/USD closed at 1.2594 after testing the 1.2500 handle, while EUR/JPY registered a 19-pip gain. What’s in store for the euro today?
Judging by the dots on our forex calendar, the euro is in for a big day! Not only will France conduct its 10-year bond auctions, but Germany will also publish its factory orders report at 10:00 am GMT!
Of course, all other economic reports have nothing on the big boss of economic reports scheduled today. I’m talking about the ECB’s interest rate decision, folks! At 11:45 pm GMT we’ll know if the central bank has decided to cut its rates like many market players are predicting.
At around 12:30 pm GMT Super Mario will take center stage, where he is expected to announce some form of bond-buying program that would help ease the sky high peripheral bond yields. Will the ECB present a clear program and inspire risk appetite, or will it disappoint expectations by leaving a lot to interpretation? This is one market event that you shouldn’t miss, forex warriors!
So that’s what Draghi and his men had been working on! The ECB decided to keep rates unchanged at 0.75% but introduced a new program called the OMT. What the heck does this and how did the euro take the news?
OMT, which stands for Outright Money Transactions, is the ECB’s plan to help lower borrowing costs by buying government bonds from weaker euro zone nations. What’s particularly impressive and at the same time questionable about this program is that it is unlimited in size and has no minimum credit requirement. This program is intended to replace the SMP or Securities Market Program, which was introduced back in March 2010.
The central bank also cut their growth forecasts from a range of -0.5% to 0.3% to roughly -0.6% to -0.2% as they believe that there are further risks to growth. As for inflation, they raised their forecasts from 2.3%-2.5% to a range of 2.4% to 2.6% for the year.
EUR/USD initially sold off immediately right after the rate statement and dipped to a low of 1.2561 but it was able to recover and end the day in the green at 1.2637.
There are no red flags left on the euro zone’s schedule for today but that doesn’t mean it’ll all be easy breezy for EUR/USD today. Bear in mind that the U.S. is set to release another bombshell in the form of its NFP report at 1:30 pm GMT today and that this could set off more fireworks in the markets during the U.S. session. Make sure you check out my buddy Forex Gump’s NFP predictions if you plan to trade this event!
Now that’s how you end the week with a bang! Thanks to optimism surrounding the ECB’s latest proposals, the euro continued to surge last Friday, marking 168-pip and 53-pip victories versus the dollar and yen respectively. Book it, baby!
Factors that also helped the euro last Friday were rumors about the SNB’s EUR/CHF peg, as well as better-than-expected German industrial production figures.
Word on the forex rumor mill is that our buddies over at the SNB are considering raising the EUR/CHF peg from 1.2000 to 1.2200. Meanwhile, it seems that industrial production in Germany picked up by 1.3% last month, which was much greater than the 0.1% expectation.
For next couple of days, we’ve only got second-tier data in the form of the Sentix investor confidence index due today at 8:30 am GMT. Expectations are that the index will print at -29.6, which would be a slight improvement from the -30.3 we saw the previous month.
The big news of the week will be the German high court’s ruling on the constitutionality of the European Stability Mechanism on Wednesday.
This vote is very important, as it will dictate how big of a contribution Germany can make to the permanent bailout program. If the high court concludes that Germany may participate in the ESM, it could give a major boost to higher-yielding currencies. On the other hand, if the high court decides that it is unconstitutional, it may lead to the euro giving back all its gains from late last week.
Not so fast, little one! After rallying by more than a hundred pips last Friday, EUR/USD erased some of its recent gains as it closed at 1.2759, 52 pips down from its 1.2811 open price. EUR/JPY also ended the day in the red as it retreated from the 100.00 handle and closed at 99.84.
There were hardly any reports on the euro zone’s schedule yesterday, save for the French industrial production figure and the euro zone Sentix investor confidence report, both of which came in better than expected. Without any other reports that could’ve influenced risk sentiment yesterday, much of the euro’s losses could probably be attributed to quick profit taking after Friday’s rallies.
There are no major reports on the euro zone’s agenda for today, leaving euro pairs to take their cue from market sentiment. Bear in mind, however, that the Dutch are set to hold elections today while Germany’s constitutional court is set to discuss the validity of the euro zone’s rescue funds. If all goes smoothly, the euro might have a chance to hold on to its recent gains. Otherwise, a euro selloff might be in order. Keep your eyes and ears peeled for updates!
The euro is back on the winners’ list, baby! With traders anticipating good news from today’s major events, the shared currency had an easy time finding interested buyers. EUR/USD found itself 99 pips higher at 1.2858, while EUR/JPY crept up 12 pips to finish at 99.96.
Yesterday’s moves had little to do with yesterday’s economic releases… 'cause we all know the euro zone didn’t release anything noteworthy. Instead, the euro’s rally can mostly be attributed to market expectations. Traders are feeling good about today’s lineup of events and they’re hoping we’ll get positive results!
Today, the euro zone is set to hold three major events - European Commission President Jose Manuel Barroso’s the banking union proposal, the Dutch elections, and the German Constitutional court ruling (8:00 am GMT). Today’s developments could have a drastic impact on the euro zone economy over a long period of time, so the markets are keen on seeing positive outcomes.
As outlined in Forex Gump’s article on the 3 events that could rock the markets this Wednesday, each of these could have a bearish or bullish effect on the euro, depending on its outcome. If you want to learn more about these events, you only need to head on over to Forex Gump’s blog!