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Euro Bounces as US Indicators Disappoint

By , November 25, 2014 6:31 pm

1,200 eurosThe euro bounced today after the initial drop as some economic indicators released from the United States were not as good as dollar bulls were hoping for, reducing the shine of the US currency.

The Conference Board consumer confidence index for the USA fell this month instead of rising as was predicted by market analysts. The Richmond Fed manufacturing index slumped from 20 to 4 in November. While a drop was expected, most experts did not think that it would be so big.

The euro dipped earlier as US gross domestic product came out stronger than was anticipated. The second estimate demonstrated 3.9 percent growth in the third quarter of this year compared to the first estimate of 3.5 percent and the consensus forecast of 3.3 percent.

The shared 18-nation currency also rallied yesterday due to the positive German business climate index.

EUR/USD advanced from 1.2441 to 1.2471 as of 23:14 GMT today after falling to 1.2402 earlier. EUR/JPY traded at about 146.99 following the drop from 147.13 to 146.29. EUR/GBP rose from 0.7918 to 0.7940.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

Earlier News About the Euro:

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Outlook for Euro: Bears Wait for Downtrend Resumption

By , November 24, 2014 3:18 pm

Mixed euro billsThe euro has been performing decently for the most part of the last week but ended the week on a sour note after comments from the central bank. Can the currency recover or will it drop to new lows? That is the question many Forex market participants are looking an answer for.

The major bearish factor for the currency is the policy outlook, and it is not likely to change anytime soon. European Central Bank President Mario Draghi said on Friday that policy makers are worried about inflation and are ready to take any steps necessary to avoid deflation. The comments drove the euro down and continued to weigh on it still. This means that this week’s inflation data for the eurozone will be important for determining euro’s performance in the near future. Analysts predict an increase of consumer prices by 0.3 percent for this month – not a bad reading, but lower than the previous month’s 0.4 percent.

Last week’s policy minutes from the Federal Reserve revealed that US policy makers are also concerned about inflation. Yet the notes were rather hawkish in general, giving a boost for the US dollar. As a result analysts are bearish on the EUR/USD currency pair. DailyFX said:

The prospect of further stimulus remains enough to keep Euro bulls at bay. If anything, Euro rallies are likely to be of the short covering variety, as non-commercials/speculators hold their net-shorts at 168.7K contracts.

Forex Crunch echoed the sentiment, stating:

After long days of consolidation, monetary policy divergence pushed the pair lower and this probably isn’t over, as the ECB is certainly determined to act decisively.

Bear in mind that these forecasts are suitable for the euro’s performance against the greenback and are not necessary reflect movement against other peers. The yen in particular has been the biggest loser recently among major currencies. Considering the latest positive data from Germany, it is not hard to believe that the shared 18-nation currency may be able to hold ground or even rally against the currency of Japan.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Euro Loses Ground by Weekend

By , November 22, 2014 11:36 am

20-euro bill and the map of EuropeInitially, it looked like this trading week would be another week of consolidation for the euro. Yet the shared 18-nation currency lost its ground by the weekend due to combined influence of poor economic indicators and comments from European policy makers.

Comments of European officials hurt the euro at the start of the week. The positive German economic sentiment allowed the currency to gain ground, but this did not last long as the positive data was followed by worse-than-expected Purchasing Managers’ Indexes. They did not break the currency immediately. It is comments of European Central Bank President Mario Draghi on Friday that turned out to be the last straw that removed any hope for the euro to rally.

While the common currency of the eurozone has not entered a full-fledged downtrend yet, the future looks bleak for the euro. It will be interesting to see how the currency will behave next week, which may be decisive for the euro.

EUR/USD sank from 1.2531 to 1.2392 (1.1 percent) over the week. EUR/JPY rallied from 145.97 to 149.13 (the highest level since October 2008) but retreated to 145.88 by the weekend. EUR/GBP dropped from 0.7988 to 0.7912 (1.0 percent).

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Euro Plunges Following Draghi’s Comments

By , November 21, 2014 5:42 am

Mixed euro billsEuro is heading much lower today, plunging following the latest comments by ECB President Mario Draghi. His insistence that the ECB will do whatever it takes to stimulate the eurozone economy is driving the 18-nation currency lower today.

Euro continues to trade near session lows today, losing ground across the board following the latest remarks from Mario Draghi, the President of the European Central Bank. Draghi indicated that asset purchases are ready to ramp up in an effort to help stimulate the eurozone economy. In remarks made early on Friday, Draghi insisted that the ECB is prepared to do whatever it takes to boost inflation in the 18-nation currency region.

The remarks had an immediate impact on the euro, sending it lower against its major counterparts. Quantitative easing is designed to weaken a currency, and the rise of more asset purchases by the ECB will mean more weakness for the euro. In fact, many expect that the euro will experience aggressive weakness. Draghi’s comments came after the latest PMI data was released about the eurozone, as well as numbers indicating that annual inflation in the 18-nation region was at 0.4 per cent.

At 11:43 GMT EUR/USD is down to 1.2422 from the open at 1.2545. EUR/GBP is down to 0.7931 form the open at 0.7992. EUR/JPY is down to 146.5540 from the open at 148.0410.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Swiss Franc Joins Euro in Decline

By , November 21, 2014 5:40 am

Swiss coins on franc notesThe Swiss franc sank today as Governing Board Member Fritz Zurbruegg said that the Swiss National Bank will take any steps required to keep the ceiling on the currency in place. The Swissie declined together with euro.

Zurbruegg said in a speech yesterday:

The SNB will continue to enforce the minimum exchange rate with the utmost determination. To this end, it is prepared to purchase foreign exchange in unlimited quantities and to take further measures immediately if required.

The franc was moving in tandem with the euro since the SNB has introduced the cap back in 2011. The shared 18-nation currency also fell today after European Central Bank President Mario Draghi said that the ECB would expand asset purchases in case the inflation outlook deteriorates.

USD/CHF jumped from 0.9582 to 0.9677 as of 11:59 GMT today. EUR/CHF was up from 1.2017 to 1.2022 though it retreated from the daily high of 1.2032.

If you have any questions, comments or opinions regarding the Swiss Franc, feel free to post them using the commentary form below.

Earlier News About the Swiss Franc:

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Eurozone PMI Data Sends Euro Lower

By , November 20, 2014 5:16 am

Euro banknotes and coinsThe latest PMI data out of the eurozone is weighing on the euro today. A reading that moved unexpectedly lower is weighing on the 18-nation currency as Forex traders contemplate continued slowed growth, even with the ECB’s efforts to boost the economy.

Many analysts, economists, and Forex traders expected to see an improvement in eurozone PMI today, but were disappointed when the actual numbers came out. Rather than moving higher, up to 52.3, the PMI for factories and services in the eurozone fell to 51.4 in November. Even though anything above 50 indicates expansion, the reality is that this is the lowest level for the eurozone in 16 months, and there are concerns that continued slowing could result in bigger problems for the euro area economy.

Indeed, many expect that now, after seeing that the ECB’s efforts to this point have been largely ineffectual in boosting the eurozone economy, there will be more stimulus efforts. Moves to boost the economy, including quantitative easing, are likely on the table for the ECB right now, and that means a weaker euro. The 18-nation currency is already down in anticipation.

At 11:43 GMT EUR/USD is down to 1.2536 from the open at 1.2543. EUR/GBP is also lower, down to 0.7995 from the open at 0.8001. EUR/JPY is down to 147.9510 from the open at 147.9930.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Euro Gains with Help of Positive Economic Sentiment

By , November 18, 2014 5:48 pm

20-euro bill and the map of EuropeThe euro ended yesterday’s trading session with solid gains and is trading sideways during the current session, unsure where to go now. The currency was rising on the back of the surprisingly good European economic sentiment.

The ZEW Indicator of Economic Sentiment for Germany climbed from -3.6 in October to 11.5 in November. The actual figure was far above the predicted reading of 0.9. The Indicator of Economic Sentiment for the Eurozone has jumped from 4.1 to 11.0 this month, also exceeding forecasts by a wide margin.

The euro halted its decline against the dollar on November 7 and was consolidating since then. Prospects for additional monetary stimulus from the European Central Bank still weigh on the common 18-nation currency, but for now the euro is slowly crawling upwards. The shared currency is even stronger against the sterling and the yen — the losers on the Forex market as of now.

EUR/USD climbed from 1.2449 to 1.2533 yesterday and traded at 1.2525 as of 00:14 GMT today. EUR/JPY was near 146.73, trading close to the highest rate since October 2008, after rising from 145.21 to 146.44. EUR/GBP traded at about 0.8018 following the rally from 0.7958 to 0.8016.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Euro Attempts to Recover During Early Trading

By , November 17, 2014 8:02 pm

Euro sign monumentThe euro is attempting to recover at the start of today’s trading session after sinking yesterday. The currency was soft during the previous session as comments from European policy makers pictured a pessimistic outlook for Europe’s economy.

The Bundesbank said in its monthly report yesterday:

The further deterioration in economic expectations and the stagnation of new orders point to a rather sluggish course of economic development in Germany until at least the end of 2014.

European Central Bank President Mario Draghi echoed the pessimistic outlook, saying in his speech:

The euro area growth momentum has weakened over the summer months and most recent forecasts have been revised downwards.

Draghi added:

Risks to the economic outlook continue to be on the downside.

The euro sank after the comments while it had already been weakened by risk aversion caused by recession in Japan. Yet the shared 18-nation currency managed to rise at the early Tuesday’s trading despite the negative fundamentals.

EUR/USD ticked up from 1.2449 to 1.2465 as of 1:03 GMT today. EUR/JPY was up from 145.21 to 145.28, touching the high of 145.49. EUR/GBP advanced from 0.7958 to 0.7967.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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Pound Drops vs. Dollar, Gains on Euro

By , November 17, 2014 2:36 pm

A fan of 50-pound billsThe Great Britain pound fell against the US dollar during the current trading session as today’s data showed decline of UK house prices. The general risk-off market sentiment was not helping the currency to hold ground against the greenback though it allowed the sterling to outperform the euro.

The Rightmove House Price Index dropped 1.7 percent in November from the previous month. House prices were still up on an annual basis. The unexpected recession in Japan made Forex traders prefer safer currencies, not riskier ones. This hurt the sterling, which was already soft due to last week’s comments from policy makers.

GBP/USD declined from 1.5682 to 1.5641 as of 20:21 GMT today following the rally to 1.5735. EUR/GBP edged down from 0.7987 to 0.7961.

If you have any questions, comments or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

Earlier News About the Great Britain Pound:

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Euro Higher Today, but Could Fall Later

By , November 13, 2014 7:11 am

One euro coinEuro is higher against its major counterparts right now, but it could fall later, thanks to a report indicating that the outlook for the eurozone is worse than expected, and that might prompt action from the European Central Bank.

Growth projections for the eurozone continue to fall, but that isn’t weighing on the 18-nation currency right now. Euro is mostly higher today. That could change, though. A report released today indicates that eurozone inflation for next year is expected to be at 1.0 per cent, which is lower than the earlier forecast for 1.2 per cent.

The report cites problems in Ukraine and the Middle East as problems. Additionally, ECB President Mario Draghi seemed to indicate that asset purchases could be in the future if the eurozone economy doesn’t pick up the pace. With this recent report, it looks as though the ECB may have to resort to those measures.

For now, though, the euro is enjoying a bit of a reprieve. However, if concerns continue to plague the 18-nation currency region, it might not be long before the euro starts losing ground again.

At 11:52 GMT EUR/USD is up to 1.2464 from the open at 1.2435. EUR/GBP is up to 0.7910 form the open at 0.7877. EUR/JPY is up to 144.1710 from the open at 143.7440.

If you have any questions, comments or opinions regarding the Euro, feel free to post them using the commentary form below.

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