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Euro Continues to Drop on Expectations of More Easing

By , December 18, 2014 5:18 am

1,200 eurosThere are expectations of more easing early in the coming year, and that is sending the euro lower today. Expectations that the ECB will have to take more steps to support the eurozone economy are being priced into the market right now.

Years of austerity are taking their toll in the eurozone. While the austerity measures are meant to help eurozone countries get back on track with their balance sheets, the reality is that it has been slowing down the eurozone economy. As a result, the European Central Bank has had to participate in easing measures in an effort to stimulate the economy. These measures weaken the euro against its counterparts.

However, even with the weakening euro, there hasn’t been a lot of success for the eurozone economy. It continues to see difficulties in recovery, and the ECB is expected to try fresh measures next year. The addition of Lithuania isn’t expected to be a lot of help to the eurozone economy, and meanwhile there are concerns about the ability of Germany and France to shore up the rest of the eurozone.

At 11:30 GMT EUR/USD is down to 1.2327 from the open at 1.2342. EUR/GBP is down to 0.7876 form the open at 0.7926. EUR/JPY is down to 146.1200 from the open at 146.4890.

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 Mostly Lower Against Major Counterparts on Greece

By , December 15, 2014 6:34 am

Focus on 50-euro notesEuro is mostly lower against its major counterparts today, thanks to expectations of future weakness, along with another drop in gold prices. One of the biggest reasons that euro weakness is becoming an issue again is the fact that there are rumblings in Greece. And, of course, it doesn’t help that risk appetite is once again becoming an issue.

In Greece, the presidential election is being advanced this month. While there is a good chance that the winner will toe the current line, there is also the risk that the Syriza candidate will win. While all involved insist that they will remain in the eurozone, there are some policies pursued by Syriza that are incompatible with eurozone requirements. This is an unlikely scenario, but one that has re-awakened many to the realities of the eurozone.

Unfortunately, the eurozone economy hasn’t recovered as well as many could wish, and there remain concerns that more extraordinary measures will need to be taken by the European Central Bank in order to keep the eurozone together, while stimulating the economy. Also not helping is the drop in gold prices and the reduction in risk appetite.

At 11:23 GMT EUR/USD is down to 1.2425 form the open at 1.2478. EUR/GBP is up to 0.7933 from the open at 0.7929. EUR/JPY is down t 147.4080 from the open at 147.9200.

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 Gets a Temporary Boost

By , December 9, 2014 6:20 am

A fan of 500-euro billsEuro is heading higher today, gaining ground against most of its major counterparts, as commodities gain and as Forex traders consolidate previous positions.

Earlier, the euro had reached a two-year low against the US dollar, falling on expectations that the Federal Reserve will raise rates sooner rather than later. However, after reaching that low, things started turning around when Forex traders began consolidating their positions. Additionally, euro is also finding support as gold prices surge upward. It’s not a big gain for gold right now, but it’s enough to provide a little help to the euro.

Even though the euro is mostly higher right now, there aren’t expectations for long-term strength. There are too many concerns about the eurozone, and policy divergence between the 18-nation currency region and the United States is too great. Additionally, the ECB is expected to follow through with some drastic easing measures soon. All of this points to long-term euro weakness, rather than continued strength.  Now is more about repositioning than it is about anything else.

At 11:44 GMT EUR/USD is gaining ground, moving up to 1.2352 from the open at 1.2311. EUR/GBP is also higher, heading up to 0.7897 from the open at 0.7868. EUR/JPY is lower, though, moving down to 148.2580 from the open at 148.5450.

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 Ends Week with Losses vs. Dollar, Mixed Against Other Currencies

By , December 6, 2014 7:35 am

20-euro bill and the map of EuropeThe euro demonstrated big losses against the US dollar this week, falling to the lowest level in more than two years. The euro’s performance against other currencies mixed: the shared 18-nation currency ended the week lower against the Great Britain pound, flat versus the Australian dollar while against the Japanese yen the euro reached a new multi-year high.

Last week, analysts were expecting resumption of decline for EUR/USD, but it did not happen. As it turned out, experts were right about the direction of the currency pair’s movement, just missed timing of the move as the drop happened this week.

The euro was performing poorly ahead of the major event for this week — the policy meeting of the European Central Bank. Yet the currency climbed after the ECB policy announcement, and it looked that the currency may hold ground after all. But Friday’s non-farm payrolls did not give a change for the euro to recover and it slumped to a new low.

Many other major central banks were holding meetings this week too: the Bank of England, the Bank of Canada and the Reserve Bank of Australia. All of them kept their monetary policies unchanged.

Among other important news was the downgrade of Japan’s credit rating by Moody’s Investor Service. It allowed the euro to gain on the yen as the Japanese currency was the weakest on the Forex market.

EUR/USD by 1.2 percent to 1.2289 this week — the lowest weekly close since August 2012. EUR/GBP settled at 0.7892 — noticeably above the weekly low of 0.7832 but far below the opening of 0.7961. EUR/AUD ended the week flat at 1.4759. EUR/JPY rallied from 147.96 to 149.24 — the strongest weekly settlement since September 2008.

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 Jumps as ECB Makes No Move

By , December 4, 2014 5:29 pm

Multiple euro banknotes and coinsThe euro climbed today after the European Central Bank refrained from expanding stimulus just yet. The currency came off its highs but remains far above the Thursday’s opening as of now.

ECB President Mario Draghi said in his speech after the policy decision:

Based on our regular economic and monetary analyses, and in line with our forward guidance, we decided to keep the key ECB interest rates unchanged.

The shared 18-nation currency rallied after the announcement. Absence of extra stimulus relieved some pressure from the euro. This does not necessarily mean that the currency will rally now. Draghi remained committed to spurring inflation by any means necessary and signaled that he may act next month:

Should it become necessary to further address risks of too prolonged a period of low inflation, the Governing Council remains unanimous in its commitment to using additional unconventional instruments within its mandate. This would imply altering early next year the size, pace and composition of our measures.

Indeed, some analysts think that the current rise of the euro is a selling opportunity.

EUR/USD rallied from 1.2310 to 1.2456 before trading at 1.2385 as of 23:32 GMT today. EUR/GBP climbed from 0.7847 to 0.7900, touching the high of 0.7922 intraday. EUR/JPY advanced from 147.46 to 148.43, and its daily high was at 148.95.

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 Falls Across the Board Ahead of ECB

By , December 3, 2014 6:08 am

One euro coin and a chartSpeculation is running high that the ECB will announce more easing actions after its policy meeting tomorrow. As a result of poor economic data, the euro is at its weakest in more than 24 months, and many expect more weakness from the 18-nation currency.

Tomorrow, ECB President Mario Draghi will announce what’s next for monetary policy in the eurozone. Many expect that policymakers will announce further efforts to ease the situation and stimulate the economy. Draghi has already said that the ECB is willing to do just about anything to keep the economy going and save the eurozone, and that means that fresh efforts to ease monetary policy, even as it weakens the euro, are expected.

Right now, the expectations, especially following the latest disappointing purchasing managers’ surveys throughout the eurozone, are for the ECB to announce asset buying measures. These expectations are sending the euro lower practically across the board, and the euro is down to its lowest point in more than two years.

At 11:16 GMT EUR/USD is lower, down to 1.2336 from the open at 1.2381. EUR/GBP is also lower, dropping down to 0.7878 from the open at 0.7916. Sterling is getting help from better than expected data. EUR/JPY is even down, falling to 147.2840 from the open at 147.6230.

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 Trades Mixed After Producer Prices Data

By , December 2, 2014 5:39 am

Stack of one-euro coins on a chartOnce again, economic data out of the eurozone is causing concern for Forex traders and investors. However, the disruption isn’t as widespread as some might think. Rather than trading down across the board, the euro is trading mixed against its major counterparts.

The latest producer prices data fell again, declining from September to October, according to Eurostat. A 4.0 per cent decline was greater than the expected 0.3 per cent drop, and represented the sharpest month over month decline in about a year. With more economic trouble for the eurozone, many expect the European Central Bank to take action on Thursday.

ECB officials will meet for a monthly policy meeting on Thursday, and determine what to do to stimulate the economy. While the euro is trading lower against the US dollar on this news, it has yet to move into the red against other currencies. The expectations of more weakness, though, are there, and the 18-nation currency is likely to see more drops in the future, even though it is holding its own tolerably well right now.

At 11:29 GMT EUR/USD is down to 1.2447 from the open at 1.2472. EUR/GBP is higher, though, gaining to 0.7932 from the open at 0.7924. EUR/JPY is up to 148.0820 from the open at 147.5690.

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 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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