By Javier Paz, ForexDatasource.com The following is an extract of the weekly euro and sterling report available for free at the ForexDatasource blog Euro – Current Scenario As we expected, the dovish comments from ECB VP Papademos set the tone for a bad euro week (down 3.0%). The temporary euro boost from the BoE rate [...] [...more]
EURO Report Current Environment The weekend comments from ECB VP Papademos (ECB to “act appropriately” in slowdown) is the second signal in 7 days that ECB members are open to rate cuts in contrast to comments from ECB President Trichet. Opportunistic traders have speculated that the overnight yield advantage of the euro alone could support [...] [...more]
STERLING REPORT Current Environment A substantial amount of year-end volatility was seen for cable on Thursday (350 pips range in 2 hours), but also due in part as a response to Prime Minister Brown dramatic appeal to Britton resilience during troubled times. Despite closing the week lower by 1.1% to the US dollar, we see [...] [...more]
We should avoid reading too much for or against the euro over the events of this past week. Clearly, the strong euro rally appears to be on hold. We believe that dovish comments from an ECB councilmember plus weaker than anticipated data out of the EU and Germany this past week weakened the enthusiasm of euro bulls. Our analysis does project modest euro gains against the dollar for the week. [...more]
This past week sterling waged and lost a demoralized battle against the major currencies. The weaker than expected PPI Input (-3.3% m-o-m) pointed to a level of economic weakness greater than that seen on continental Europe. The euro rallied from that point forward into record territory, climbing to 0.90 and fueling talk of EUR/GBP reaching parity (1:1) in the near term. [...more]
A perception that the EURUSD has bottomed is floating around. The logic for this theory is that the EU zone economy is showing less strains than the US economy. Add to that the words from Trichet who drew a line on the sand indicating a virtual end to the ECB rate cuts. The euro is ripe for a pullback around 1.31 but the lack of major EU economic news may give enough momentum to challenge this key resistance. [...more]
