Boy, did the markets do a number on the euro or what! It practically erased all of its gains from Thursday, as EUR/USD dropped 105 pips to greet the weekend at 1.3003. What the heck happened?
Well, it was a combination of things, really. Aside from the positive NFP results dragging EUR/USD down in favor of the dollar, the euro had to deal with a couple of issues on the domestic front as well. First, it was bogged down by German industrial production data, which showed flat growth in January versus forecasts for a 0.6% surge. Then it was weakened by news that Fitch cut Italy’s debt rating down to BBB+ from A- with a negative outlook. Bummer, dude!
Hopefully this week, it can make up for some of its losses, but considering that the euro zone doesn’t have any tier 1 reports coming out, it might have difficulty doing so. The only reports on tap for today are German trade balance (due 7:00 am GMT) and French industrial production (due 7:45 am GMT). I’m not counting on these to be major market movers, but the markets could react if these reports print wildly off forecasts. Check out our economic calendar to learn more about what to expect!
Hang in there, fellas! The euro held its ground against its counterparts yesterday after a lack of data from the major economies spelled good news for the currency. EUR/USD remained above 1.3000 while EUR/JPY and EUR/GBP also showed gains. What’s up with that?
It seems that the euro traders aren’t interested in its fundamentals. Yesterday we not only saw weak German trade balance and French industrial production, but we also saw higher Italian bond yields on news that a new election is a very real possibility for Italy.
Good thing that the lack of any major data from the U.S. and other major economies prompted traders to take profits from their NFP report trades. Other traders also bought the euro thinking that it’s currently at a bargain. Looks like Mario Draghi’s optimism last Thursday did the trick, eh?
Today the only reports scheduled are Germany’s consumer price index and wholesale price index at 7:00 am GMT. Both reports are expected to print better numbers than last month. Still, something tells me that investors would rather pay attention to the U.K. manufacturing production report at 9:30 am GMT. Keep your eyes peeled for the U.K.’s major report, will ya?
Ho humm… EUR/USD continued to move sideways for yet another day, although volatility did pick up a bit during the London session. The pair surged to a high of 1.3073 then fell right back to the 1.3025 area during the U.S. session.
The lack of top-tier data from the euro zone kept EUR/USD range-bound for most of the day. Only a couple of inflation reports from Germany were released and these revealed that consumer price levels rose by 0.6% in February while wholesale price levels increased by 0.1% during the same month.
For today, there aren’t any major reports on the euro zone’s agenda once more, which suggests that another round of range-bound trading could be in the cards. Take note though that France is set to release its jobs figures and CPI around 6:30 am GMT and these could spark a little volatility among euro pairs. If you’re planning on trading EUR/USD, the U.S. retail sales data due 1:30 pm GMT could provide more movement for this pair.
The euro fell deep into the bear lair yesterday after a couple of economic reports from the region spooked the currency bulls. EUR/USD fell by 76 pips while EUR/GBP and EUR/JPY also ended the day in the red.
The euro zone’s industrial production report started the bears’ party when it showed a 0.4% decline for the month of January, which is a drop from the 0.9% growth that we saw in December.
The Italian bond auctions also didn’t help as the Italians failed to meet their targeted sales and even paid more for the bonds that they sold. The government sold a total of 6.993 billion EUR, a bit short of its 7.25 billion EUR target. The yield for the December 2015 bond also registered at 2.48%, up from 2.30% last month.
Aside from the ECB monthly bulletin up at 9:00 am GMT we’ll also see the region’s quarterly employment change report at 10:00 am GMT. It’s also Day 1 of the EU Economic Summit today. Since they don’t use white smoke to signal if they have come to any agreement, we should keep our eyes peeled for any speeches from the leaders that might impact the demand for the euro.
Now that’s what I call a comeback! After getting sold off for a bit during the London session, the euro managed to step up its game when the New York markets opened. EUR/USD bounced off its intraday low at 1.2911 to finish the day 48 pips above its opening price at 1.3006. Meanwhile, EUR/JPY was up 55 pips pips at 124.98 by the day’s close.
Bad news set the euro off to a rocky start. For one, the euro zone employment change report for Q4 2012 printed a much bigger contraction of 0.3% than the 0.1% decline that markets were expecting. There was also Spain’s “special” bond auction which showed that only 800 million EUR worth of bonds were sold when the government’s target was somewhere between 1 to 2 billion EUR. To some forex traders, this meant that investors are still jittery about Spain.
Then again, it’s noteworthy to mention that yields were so much lower at 5.445% compared to the last auction when bonds were sold at 5.928%.
Ultimately though, it would seem that the euro’s rally was largely due to the better-than-expected economic reports we got from the U.S. (You can read more about them in my USD commentary.)
Will we see a similar reaction from the euro today? After all, we only have the euro zone CPI report due at 10:00 am GMT but there are a handful of reports scheduled from the U.S. It looks like we’re seeing a bit of risk sentiment dictating price action. If this carries on, positive U.S. data may just help the euro extend its gains!
The euro ended last week strongly, taking EUR/USD to a new intraweek high. The pair traded as high as 1.3108 before it settled 53 pips above its opening price at 1.3058. But it doesn’t seem to be doing to well to start the new week. Find out why!
As expected, inflation data for the euro zone remained unchanged in the month of February. Headline CPI came in to show a 1.8% rise in prices last month, while the core figure showed a 1.3% increase.
Unfortunately, euro zone news over the weekend was a lot grimmer. Just a few hours ago, the markets were shook up by reports that Cyprus will have to tax depositors as part of its bailout plan. As a result, many Cyprus depositors have already begun withdrawing their funds from their banks. This sparked a broad-based case of risk aversion, as many believe it could serve as a trigger for another round in the debt crisis.
Not surprisingly, the euro has been off to a very weak start to the week, with EUR/USD gapping down about 70 pips. Unfortunately, it seems as though this will continue to be the main story for today, as we only have a couple of tier 3 reports scheduled for release in the next 24 hours. Keep your eyes lock on the euro, homies! I wouldn’t be surprised if it continues trading lower!
It may already be Spring but there weren’t any chirping birds, blossoming flowers, or a warm ray of sunshine for the euro in yesterday’s trading. Instead, a cloud of uncertainty hung over the shared currency, its outlook as gloomy as a cold November night.
EUR/USD finished 7 pips lower at 1.2931. The euro’s attempts to rally against the yen and the pound also proved futile. EUR/JPY got rejected at the 124.00 handle while EUR/GBP was capped well below .8600.
Cyprus continued to dominate market headlines. As Forex Gump discussed in his blog, the debt-ridden country is now struggling to iron out a bailout deal. The parliament is supposed to vote on the levy today.
According to some analysts, the approval of the levy (allowing Cyprus to save 5.8 billion EUR) should be bullish for the euro as it would help the government secure its much-needed bailout from the Troika. However, it may not be enough as its approval would undermine the credibility of the entire European banking system.
If you plan on trading today, be sure you keep an ear out for updates from the country. I’m pretty sure that the spotlight would continue to be focused on Cyprus.
Also make sure that you keep tabs on the reports we have on tap from the euro zone. Due at 10:00 am GMT, the German ZEW Economic Sentiment is seen to come in at 47.9 while the region-wide reading is eyed at 43.7.
Worse-than-expected figures could only fuel the euro’s sell off, while positive readings could help boost the currency. Don’t miss them, okay?
The slip and slide continues! With Cyprus rejecting the deposit levy, traders were left with little choice but to dump the euro once again. The shared currency lost another 42 pips to the dollar, while giving back 64 pips to the yen.
Things are really starting to get ugly in the euro zone. Now that Cyprus’ Parliament has officially rejected the deposit levy, officials are left scrambling to find alternative ways to raise funds and chip away at the country’s budget deficit. Word on the street is that the Finance Minister might propose a different kind of tax on deposits, one that involves hitting Russian deposits with a tax of 20% to 30% in exchange for ownership of Cyprus’ national gas company. But remember, these are all just rumors as of now, and we don’t even know if Russian investors would agree to such a deal.
In any case, with the rejection of the levy comes the rejection of Cyprus’ bailout deal, something it urgently needs. This seems to be a major concern for investors, who feel that it the euro zone is at risk of contagion once again.
In other news, we got word that German investor confidence rose slightly in March, but sadly, we can’t say the same about the rest of the euro zone. The German ZEW economic sentiment report ticked up from 48.2 to 48.5, while the euro zone index dropped sharply 42.4 to 33.4.
Later today, we have German PPI (7:00 am GMT) and current account (9:00 am GMT) data coming out. German PPI is expected to show 0.2% increase after last month’s 0.8% rise. Meanwhile, the euro zone’s current account surplus is anticipated to narrow to 7.9 billion EUR from 13.9 billion EUR.
Looks like the euro bears took a break yesterday, as they allowed the shared currency to recover against the dollar and the yen. Still, with European leaders still scrambling to make a deal for Cyprus, how long will this sentiment last?
The markets didn’t pay much attention to the German PPI (-0.1% vs. expected 0.2%) or the better-than-expected current account (14.8 billion EUR surplus vs. expected 7.9 billion EUR surplus). Instead, euro bears decided to cover their short positions ahead of the FOMC statement.
Currently, European leaders are trying to work out another deal as the first deal (a.k.a. imposing bank levies) wasn’t approved, while the second one (withdrawing funds from a pension fund and / or selling a bank to Russia) was junked as well. For now, the markets will remain on the edge of their seats as they wait and see what type of deal the Troika can come up with.
For today, keep an eye out for those European PMIs. While most of the indexes are projected to print below the line-in-the-sand 50.0 mark, take note that all of them are seen to have made some slight improvements. If we do see any substantial improvements in the manufacturing and services sectors, it could give the euro a nice boost to build upon yesterday’s gains.
Well, that was quick! The euro’s rally was short-lived as traders resumed dumping the shared currency after some ugly PMI numbers were revealed. EUR/USD practically erased all of Wednesday’s gains, dropping 46 pips to 1.2896. Meanwhile, EUR/JPY fell to 122.38 to record a jaw-dropping 192 loss on the day.
The euro is really in trouble now! Not only has it had to deal with contagion fears stemming from Cyprus’ bailout deal, but apparently, it has to face downbeat economic data too! Thursday’s PMIs all printed in the red as the euro zone’s manufacturing and services sectors contracted once more in March. The region’s economic slowdown is getting worse, folks!
The manufacturing PMI slid from 47.9 to 46.6, just as the services PMI dropped from 47.3 to 46.5. Meanwhile, Germany, which has managed to outperform the rest of the region, also disappointed the markets with its results. Rather than expanding at a faster pace, its manufacturing sector actually contracted! As for its services sector, it did manage to grow, but at a much slower pace than anticipated. And to think, economists actually thought reports indexes would show a bit of improvement. What a downer, dude!
Today, we have the German IFO business climate index coming out at 9:00 am GMT. Forecasts have it rising from 107.4 to 107.8, but considering the recent string of ugly figures that the euro zone has been printing, I wouldn’t be surprised to if this report disappointed as well. Keep your eyes locked on the euro, boys!
Talk about resilience! Despite all the hoopla surrounding the Cyprus deal, EUR/USD stayed afloat last Friday, as it managed to edge its way back up to the 1.3000 mark. What’s happening over in Cyprus now anyway?
Over the weekend, the Cypriot government was hard at work to try and come up with a deal before banks reopen on Tuesday. The Parliament was able to agree upon capital control levels as well as forming a fund to pool government-owned assets, while other issues, such as how to restructure Cyprus’ two largest banks, as well as how big of a deposits tax to impose on accounts with over 100,000 EUR, proved to be sticker topics.
In any case, it appears that a deal has been made, as the euro is getting a slight boost during Tokyo session. Make sure you pay attention throughout the rest of the day for more details on this hot topic.
In other news, the German IFO business climate report printed at 106.7, which was below the anticipated 107.8 figure, and also slightly below last month’s reading of 107.4. This just goes to show that conditions in Germany are starting to deteriorate slightly and will be something to keep an eye on in the coming months.
Looking ahead, looks like we don’t have any hard data headed our way over the next couple of days. That said my young padawan forex noobs, you should still pay close attention to any developments over in Cyprus. If the deal seems like a feasible one, then we could see the euro recuperate some of its recent losses from the past couple of weeks!
Talk about crash and burn! The euro got heavily sold off during the latter part of yesterday’s trading. EUR/USD dropped like a rock from its intraday high of 1.3050 to 1.2830 before closing with a 96-pip loss at 1.2853. Meanwhile, EUR/JPY suffered a 133-pip loss for the day.
What the heck happened?
Well, it would seem that investors are still pretty concerned about Cyprus. Sure, the country came into terms with the Troika over the weekend and forged a deal. However, market participants are now worried that Cyprus might have just set a negative precedent (seeking help from depositors) for any future bailout.
Our forex calendar is still blank for economic reports from the euro zone today. This probably means that attention would still be focused on the euro zone. With that said, make sure you get a feel of the market’s mood before pulling the trigger on any euro trade, ayt?
Phew! With no economic data out from the euro region yesterday, the euro bears took the chance to catch a breather. EUR/USD inched by 6 pips while EUR/JPY climbed by 54 pips. Will the euro bears go back to business today?
It’s possible. At 7:00 am GMT the German consumer confidence and imports data are scheduled for release. Analysts are expecting to see a reading of 5.9 much like last month. Then, at 10:00 am GMT we’ll see Italy’s retail sales report. The 10-year Italian bond auction is scheduled for today, but no time has been specified yet.
As potentially market-moving as these data are though, I have a feeling that details on Cyprus will still dominate the newswires. More specifically, I’ll watch out for any significant European leader that has an opinion about the troubled economy.
Speeches can inspire unnecessary volatility so make sure that you leave enough room for that in your euro trades!
Look out below! The euro dropped like a rock in yesterday’s trading as bad news from the euro zone hit headlines. EUR/USD tapped its 4-month low at 1.2754 before finishing the day with an 85-pip loss. Meanwhile, EUR/JPY closed 96 pips lower at 120.59.
While the GfK Consumer Climate report for March coming in as expected at 5.9, the euro zone-wide confidence report came in worse than analysts’ forecasts and sparked a euro sell-off. According to data gathered by the European Commission, consumer sentiment declined from 91.1 in February to 90.0 in March. Yikes!
Some market junkies say that we could see further downside to the euro should economic data from Germany disappoint forecasts. So make sure you don’t miss the German unemployment change report later at 8:55 am GMT. Analysts are expecting that the number of jobless people decreased by 2,000 in February.
Also, keep an ear out for Cyprus. From what I’ve gathered, banks in the country re-open today. If too many people surge into banks to withdraw their money, talks of a bank run could once again haunt the euro.
And the selloff continues! EUR/USD struggled to stay above the 1.2800 major psychological level on Friday but it appears ready for a breakdown today. EUR/JPY, on the other hand, is still putting up a fight and trying to hold on to 120.50.
The lack of major economic data on Friday kept most euro pairs in consolidation against their counterparts. Most European banks are still on a holiday today, which suggests another round of low liquidity in the markets. Do keep an eye out for any updates regarding Cyprus’ bailout situation as the possibility of huge losses for big-time depositors is currently weighing on risk sentiment.
Also, don’t forget that the main event for the euro zone this week is the ECB rate decision scheduled on Thursday 1:30 pm GMT. Mario Draghi and his men are set to keep rates unchanged at 0.75% once more but his accompanying statement could set off some fireworks across the charts that day.
Someone has been going to the gym! Despite thin trading conditions, the euro was still able to flex its muscles versus the dollar in yesterday’s trading session. EUR/USD, which began the Asian session at 1.2806, closed the day strongly at 1.2847.
The euro mostly gained due to bad data in the U.S. The ISM Manufacturing PMI, which was predicted to print a reading of 54.2, came in worse than expected, reporting a 51.3 figure. It was also lower than the previous month’s 54.2 reading.
Today, there are two red flags on the euro zone’s forex calendar.
The first one, which will be published at 7:45 pm GMT, is the Italian Manufacturing PMI. It’s anticipated to show a 45.4 figure, slightly lower than the month prior’s 45.8 read. The second one is the euro zone’s labor report. It’s set to come out at 9:00 am GMT and is forecasted to show a jobless rate reading of 12.0%. Last month, joblessness in the euro zone was only at 11.9%. If the actual results turn out to be better than expected, we could see the euro continue to gain against the dollar.
Where to, euro? It seems that both the euro bulls and bears were startled into activity as the region released mixed economic reports. EUR/USD fell by 31 pips but EUR/GBP popped up by 52 pips. What gives?
Blame the mixed economic data and sentiment! On one hand, an upside surprise in Spain’s employment numbers and the easing of bank run fears in Cyprus supported the euro. On the other hand, manufacturing PMIs from Spain and Italy, the euro zone’s third and fourth largest economies, came in much worse than expected. Not only that, but the euro zone’s unemployment rate clocked in at 12%, still a record high for the region.
Only the euro area’s CPI estimate at 9:00 am GMT is scheduled for release today. This means that any news from Cyprus or any speeches from the euro zone leaders could have a bigger impact on the common currency than they usually do. Watch out for any speeches, aight?
Well, that was quick! The euro completely erased its losses from Tuesday as it pocketed a few pips against the dollar to push EUR/USD up from its opening price of 1.2816 to 1.2848. Where will the markets take it today?
Word on the street is that the euro could be in for some losses if ECB President Mario Draghi hints at cutting interest rates at the central bank’s rate statement scheduled at 11:45 am GMT today. Investors think there’s a small chance the ECB may lay the groundwork for such a move in light of the region’s recent economic data and instability in Cyprus.
Even the euro zone’s largest economy, Germany, has been showing chinks in its armor lately. In the past, Germany has shown much more resilience than its neighboring countries, so the fact that it hasn’t been performing too well is cause for concern and could serve as a reason for the central bank to ease its monetary policy.
The way I see it, there aren’t many reasons for Draghi to sound optimistic in today’s rate statement… but then again, Draghi has been known to surprise the markets with his remarks! You never know what the dude will say! If he plays down the euro zone’s recent reports and shows that he isn’t worried about the state of the economy and the region’s debt problems, it could just pave the way for another euro rally.
Super Mario does it again! Yesterday the euro got a double boost from the BOJ’s aggressive monetary policy as well as optimism over the ECB’s commitment to the region’s crisis. What the heck did he say that boosted EUR/USD 89 pips above its open price?
I gotta tell ya, the good vibes didn’t start until the press conference was almost over. The ECB first released its monetary policy decision, which revealed that the central bank is keeping its interest rates steady. Then, in the early part of the ECB press conference Draghi was gloomy, saying that there are downside risks for the region in the second half of the year and that the ECB’s options are limited.
EUR/USD was down by about 80 pips when someone had asked about the ECB’s plans in case an EZ country exits. Draghi then went all Super Saiyan on the guy and firmly stated that “there is no plan B” for the region. Draghi’s resolve resonated among the euro bulls, which pumped them to buy the common currency to new intraday highs.
At 9:00 am GMT today we’ll see the euro zone’s monthly retail sales data as well as its quarterly GDP report. Keep in mind though, that the U.S. NFP report is scheduled in only a couple of hours, which could limit the traders’ reactions to the reports.
Now that’s how you end the week with a bang! EUR/USD zoomed back to the 1.3000 major psychological level on Friday while EUR/JPY rallied to the 127.00 handle. Will its rallies continue this week?
Even though euro zone retail sales posted a 0.3% decline for February, the euro was able to pocket huge gains versus the Greenback and the yen as the weak NFP data dragged the dollar down while the BOJ’s aggressive easing efforts kept weighing on the Japanese currency.
For today, only a couple of minor reports are due from the euro zone, namely the Sentix investor confidence figure and German industrial production data. Investor confidence is predicted to worsen this month as the reading could slip from -10.6 to -12.6, signaling more pessimism this April. Meanwhile, German industrial production is expected to post a 0.4% uptick after staying flat in January. Keep an eye out for those releases during the London session.
There are no major reports scheduled from the euro zone for the rest of the week as the euro could keep climbing steadily after ECB head Draghi mentioned that the central bank is running out of monetary policy easing tools. Stay on your toes for any potential reversals though!