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Euro Rallies on Back of Positive Economic Data

By , July 24, 2014 5:37 pm

Euro sign monumentThe euro rallied yesterday as the vast majority of macroeconomic reports from the eurozone were positive, and the currency was able to keep gains today. While good US fundamental data did not allow the shared 18-nation currency to gain on the dollar at the previous trading session, the euro managed to rise a little versus the greenback today.

A range of manufacturing and services indicators for the eurozone was released by Markit Economics yesterday. The data suggested that the European economy is not in a terrible shape, meaning that additional stimulus might be unnecessary. Such view supported the euro, which was suffering from the negative outlook for the economy and monetary policy.

The situation in Ukraine still remains a threat to the currency, both because of the general risk-negative sentiment it creates and due to the threat of additional sanctions against Russia. The Russian Federation is one of the major European Union’s trading partners, meaning that measures against the Russian economy will likely hurt the European economy as well.

EUR/USD rose from 1.3463 to 1.3467 as of 00:44 GMT today. EUR/JPY traded at 137.01 today after rising from 136.61 to 137.06 yesterday, while EUR/GBP advanced from 0.7899 to 0.7925 at the previous trading session and remained near this level at the current session.

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 Struggles to Maintain Gains With Russian Sanctions Possible

By , July 23, 2014 8:59 am

Stack of one-euro coins on a chartEuro is struggling right now, trying to maintain the gains it eked out earlier in the session. However, that is proving a bit difficult, given the possibility of harsher sanctions against Russia over the whole issue of what’s happening in Ukraine.

As the situation in Ukraine continues to trouble just about everyone, the euro is struggling. The 18-nation currency lost ground yesterday, but is trying to eke out gains today. However, the European Union is still threatening Russia with harsher trade sanctions. This could impact Germany, a country which has strong ties to Russia — and acts as the main driver of the eurozone economy.

There are worries that sanctions against Russia could slow the already tepid eurozone economy. Euro is already struggling on the presumed policy divergence between the 18-nation currency region and its major counterparts. But, with Russia continuing to meddle in Ukraine, and now with the furor over what happened with the downed Malaysian airliner, there’s a lot of speculation that sanctions will be tightened.

For now, though, the euro is managing to hold on to small gains. But it’s still early yet in the US session, so it will be interesting to see how the day goes.

At 13:37 GMT EUR/USD is up to 1.3468 from the open at 1.3466. EUR/GBP is up to 0.7905 from the open at 0.7891. EUR/JPY is down to 136.5850 from the open at 136.6380.

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

Forex News

Euro Weakness Finally Shows as ECB Gets Serious About Stimulus

By , July 22, 2014 8:29 am

Counting 50-euro billsForex traders are seeing that the ECB is really serious about stimulus, and the result is that euro weakness, after threatening for months, finally seems to be appearing on a more long-term basis. Euro is down against its major counterparts today, noticeably dropping through the 1.3500 level against the US dollar.

Euro is mostly down today, dropping against its major counterparts due to a combination of risk aversion and efforts by the European policymakers to stimulate the eurozone economy.

In recent the months, ECB President Mario Draghi has been outspoken about possibilities designed to ease the euro and stimulate the eurozone’s economy. The ECB has already announced negative deposit rates, and asset purchases are on the table. These measures are designed to weaken the euro, and they have been working slowly, but things finally seem to be moving in that direction. It is clear that policymakers are serious about stimulus, and Forex traders are heeding that.

Also weighing on the euro are concerns about world politics. The Middle East isn’t that far from the eurozone, and concerns that more sanctions against Russia over Ukraine are also weighing on the euro.

At 13:59 GMT EUR/USD is down to 1.3470 from the open at 1.3523. EUR/GBP is down to 0.7892 from the open at 0.7920. EUR/JPY is down to 136.6695 from the open at 137.1250.

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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Attempted Euro Rally Fizzles

By , July 21, 2014 7:59 am

Euro sign monumentEuro attempted a rally against the US dollar earlier, taking advantage of the frustration many Forex traders have with US yields right now. However, that rally has fizzled out as the focus shifts to safe haven flows. Euro is lower against its low-beta counterparts, even as it gains against currencies like the pound and the loonie.

Earlier in the session, the euro looked ready to rally against the US dollar. At one point, EUR/USD reached the 1.3550 level. Right now, though, the 18-nation currency is barely above its session low against the greenback. Euro’s rally fizzled out as safe haven flows became more pronounced.

Issues relating to geopolitical instability are dominating headlines, with concerns about the continued tensions in eastern Ukraine following the downed Malaysian airliner, as well as the fighting that continues in Gaza. The desire for safe haven is overcoming the disappointment with US yields, and allowing the greenback the upper hand.

Euro is higher against other high beta currencies that rely on support from stocks, like the UK pound and the Canadian dollar. With investors concerned about instability, it’s all about safe havens today.

At 14:24 GMT EUR/USD is down to 1.3522 from the open at 1.3526. EUR/JPY is down to 137.0055 from the open at 137.1450. EUR/GBP is up to 0.7924 from the open at 0.7915. EUR/CAD is up to 1.4533 from the open at 1.4522.

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 Breaches $1.35 for First Time Since February, Recovers

By , July 18, 2014 5:25 pm

Euro sign monumentThe euro breached the $ 1.35 level for the first time since February yet was able to recover and close flat versus the US dollar, though it still ended the week with losses. The currency gained on some other majors, including the Japanese yen and the Great Britain pound.

While the euro was under pressure from risk aversion initially, the currency managed to recover after fears calmed down a bit. Of course, concerns about the economic health of the European Union remain, but for now the shared 18-nation currency gained ground.

Worse-than expected economic indicators from the United States were beneficial for the euro too. The preliminary reading of the consumer sentiment, released by University of Michigan, showed decline instead of expected improvement. The Conference Board leading indicators for the USA grew, but the growth was two times below the expected rate.

EUR/USD slid from 1.3525 to 1.3491, the lowest rate since February 6, but bounced to settle at 1.3524. EUR/JPY advanced from 136.85 to 137.07. EUR/GBP gained from 0.7907 to 0.7915, reaching the high of 0.7933 intraday.

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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ZEW Sends Euro Below 1.3600 Mark Against Dollar

By , July 15, 2014 7:47 am

Multiple euro banknotes and coinsThe euro is losing ground fast, thanks in large part to the latest data out of Germany. Concerns about the German ZEW have the euro down pretty much across the board, particularly against the US dollar. Concerns about the eurozone’s largest economy have many speculating that, perhaps, the ECB will have to take further steps to stimulate the economy of the 18-nation currency region.

Germany is the eurozone’s largest economy, and is often seen as the bellwether for the entire eurozone. The ZEW measures investor morale, and the latest reading showed a drop to 27.1, which is its lowest reading in about 18 months. Analysts had expected a reading of 28, which means that this news is even more disappointing.

There are concerns that a drop in Germany’s economy could drag on the rest of the eurozone, leading to more aggressive steps by the ECB to boost the eurozone economy. This could mean more easing — and more losses — for the euro. Right now the euro is lower against its major counterparts, including plunging through the 1.3600 against the US dollar.

At 14:41 GMT EUR/USD is down to 1.3575 from the open at 1.3619. EUR/GBP is also lower, dropping to 0.7912 from the open at 0.7971. EUR/JPY is down to 138.0815 from the open at 138.2850.

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 Moves Higher In Spite of Draghi Plan and Economic Data

By , July 14, 2014 7:18 am

Euro banknotes rolled upEuro is moving higher today, even though there is a plan from ECB President Mario Draghi to add another $ 1 trillion to banks, and even though economic data in the eurozone has proved disappointing.

Euro is higher today as risk appetite rules Forex trading. Stocks are up in Europe and in the United States, and traders are looking for yield. The euro is gaining ground against its major counterparts, in spite of news that might be construed to mean trouble.

Mario Draghi is speaking to the European Parliament today, being grilled about efforts to bolster the eurozone economy. He is also expected to champion a plan designed to put nearly $ 1 trillion in the hands of banks in an attempt to get money moving through the economy and stimulate growth.

It’s worth noting that industrial output slumped in May for the eurozone, with Eurostat reporting a 1.1 per cent drop from April to May. However, there is still a year-over-year increase, and that is preventing the data from dragging the euro lower today.

At 13:56 GMT euro is mostly higher. EUR/USD is up to 1.3619 from the open at 1.3599. EUR/GBP is also higher, moving up to 0.7975 from the open at 0.7946. EUR/JPY is up to 138.3470 from the open at 137.8550.

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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Draghi’s Proposal for the Eurozone Doesn’t Help Euro

By , July 10, 2014 8:02 am

20-euro bill and the map of EuropeEuropean Central Bank President Mario Draghi has called for new economic rules in the eurozone. These rules are designed to promote greater integration in the 18-nation currency region, with the point hopefully to stave off the economic disparities that led to the sovereign debt crisis among the periphery. The plan isn’t helping the euro’s performance much today, though.

It’s not a big surprise that the ECB is proposing some changes to the economic structure of the eurozone. Draghi and other ECB policymakers have long been interested in greater economic integration across the 18-nation currency region.

The outline calls for eurozone governments to take actions to improve the competitiveness of their economies, as well as provide greater economic integration across the involved countries, reforming the system to a degree that disparities, such as Finland rated as number three for competitiveness while Greece is ranked 91.

Draghi’s speech hasn’t provided much of a boost to the euro, though. Such reforms would be difficult to implement. On top of that, there is concern for the eurozone in general as trouble in Portugal reminds everyone that the latest crisis isn’t over.

At 13:36 GMT EUR/USD is down to 1.3609 from the open at 1.3641. EUR/GBP is down to 0.7948 from the open at 0.7951. EUR/JPY is down to 137.6675 from the open at 138.6510.

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 Turns it Around After Earlier Difficulties

By , July 9, 2014 7:33 am

Various euro denominationsA little bit of risk appetite is helping the euro turn things around today after earlier difficulties. However, many analysts still foresee problems for the euro, as Germany leads the eurozone into a further period of little to no growth.

Earlier today, the euro was struggling against its major counterparts. Now, though, things have turned around a little bit and the euro is mostly higher against these currencies. A bit of risk appetite is helping as European markets move toward gains as the day draws to a close, and as the US markets move higher.

However, risk appetite and a bit of optimism might not be enough to support the euro long term. The 18-nation currency region continues to run into growth issues. One of the biggest problems is the fact that the eurozone’s largest and most influential economy, Germany, is struggling with growth. Some analysts are worried that GDP growth for Germany will be gone by the first quarter of 2015.

This isn’t good news for the euro. Already there are calls for the ECB to ease further in an effort to stimulate the eurozone economy. If the ECB has to resort to QE, the euro could go lower.

At 14:12 GMT EUR/USD is up to 1.3620 from the open at 1.3613. EUR/GBP is up to 0.7955 from the open at 0.7946. EUR/JPY is up to 138.5380 from the open at 138.2750.

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 Drops Below 1.3600 Level Against US Dollar

By , July 8, 2014 3:15 pm

Mixed euro billsEuro has dropped below the 1.3600 level against the US dollar, and is down against other major currencies as well. There is a bit of risk aversion on the Forex market today, as well as speculation that the ECB will have to take further action on stimulus if the euro’s strength remains where it is.

Even with all that has been done by ECB policymakers to weaken the euro and stimulate the eurozone economy, things continue to move along with the euro’s strength. So far, the policymakers in the eurozone have been slow to take the step of quantitative easing, mainly because the goal is price stability and inflation. The goal isn’t necessarily a weaker euro, even though a little more weakness than what has been seen so far would probably help the eurozone economy.

Today, the euro is a little bit lower. However, it’s not much lower. Euro has dropped below the 1.3600 level against the US dollar, but it appears to be trying to move back above that benchmark. Euro is lower against other major counterparts, but not by much. Policy divergence and persistently weak data in the eurozone should be weighing more heavily on the euro, so the strength is somewhat frustrating to policymakers.

At 13:01 GMT EUR/USD is down to 1.3596 from the open at 1.3605. EUR/GBP is down to 0.7941 form the open at 0.7944. EUR/JPY is down to 138.1770 from the open at 138.5740.

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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