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Posts tagged: Euro

Euro Mostly Steady Following ZEW

By , September 16, 2014 5:59 am

1,200 eurosEuro remains mostly steady following the latest ZEW report. Even though the ZEW showed a drop, the 18-nation currency didn’t follow suit. For now, it looks as though Forex traders are settling in to the current state of things.

The latest reading of the German ZEW showed a drop to 6.9 this month, from 8.6 last month. The drop, according to analysts, is due in large part to concerns about Russia. The European Union has been putting sanctions on Russia as a result of the situation in Ukraine, and many are concerned about the impact those sanctions could have on the eurozone economy.

However, even though this reading is much lower, there hasn’t been much reaction in terms of the euro. A lot of the euro’s drop is probably already priced in, thanks to recent moves by the ECB to stimulate the eurozone economy.

Additionally, the euro, like many currencies in Europe, seems to be waiting on the Scottish independence vote. There’s a lot up in the air right now, and a number of currencies seem to be in a holding pattern, waiting on events.

At 10:49 GMT EUR/USD is up to 1.2944 from the open at 1.2940. EUR/GBP is up to 0.7933 from the open at 0.7973. EUR/JPY is down to 138. 6510 from the open at 138.7040.

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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Weak Chinese Data Hits the Euro

By , September 15, 2014 8:13 am

One euro coin and a chartEuro would have been weakening anyway, thanks to recent efforts from the ECB, but weak Chinese data is weighing on risk appetite, and the euro is down across the board.

Euro is down today, thanks in large part to the fact that there are a lot of factors weighing on the 18-nation currency. The fact that the ECB continues to take steps to stimulate the economy is sending the euro lower, as are concerns about what the latest sanctions against Russia mean for the eurozone.

The latest news that the eurozone trade surplus has grown is barely a blip on anyone’s radar today. Even though Eurostat reports that the eurozone is seeing more exports, the euro isn’t ready to pick up the pace. A lot of that probably has to do with the fact that the latest data out of China has risk appetite fleeing.

Weak data out of China, which is one of the world’s major economic drivers, is weighing on risk appetite. Not only that, but euro does trade with China, and weak data means that the euro is going to be lower.

At 10:22 GMT EUR/USD is down to 1.2920 from the open at 1.2973. EUR/GBP is down to 0.7955 from the open at 0.7970. EUR/JPY is down to 138.5995 from the open at 139.0750.

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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Is the Euro Still too Strong?

By , September 12, 2014 4:01 am

Counting 50-euro billsEuro has weakened quite a bit recently, but, even so, some European policymakers believe that the 18-nation currency is still too strong.

A strong euro is likely to hinder the eurozone economic recovery, and that is just what some policymakers think is happening now. In spite of efforts from the ECB to stimulate the economy and weaken the euro, some think that the 18-nation currency remains too strong.

Yesterday, Bank of France Governor Christian Noyer expressed his doubts that the euro was weak enough to prompt economic progress for the eurozone. The ECB has a target of 2 per cent inflation, the eurozone is well below that. Even with recent efforts to stimulate the economy by weakening the currency, it’s been difficult to move forward.

While the sentiment didn’t prompt huge losses for the euro, today the currency is trading rangebound against its major counterparts, unable to get a clear upper hand. There are still questions about what sanctions to Russia will do to the eurozone economy, and concerns about what options are left available to the ECB.

At 10:32 GMT EUR/USD is holding steady at the opening level of 1.2924. EUR/GBP has inched a little higher to 0.7953 from the open at 0.7951. EUR/JPY is also a little higher at 138.5435 from the open at 138.3450.

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 Takes a Breather, Holding Above Lows

By , September 10, 2014 8:29 am

Euro sign monument with ECB on backgroundForex traders took a step back from a recent euro selloff, helping the 18-nation currency find support above the 1.29 level. While there is greater mid-term to long-term demand for the greenback, right now the euro is looking for a bit of relief.

Following remarks from ECB officials and others that are supportive of further easing for the euro, the 18-nation currency sold off. Today, the euro is taking a breather, holding above 14-month lows against the US dollar, finding support above the 1.2900 level. Euro is also finding support against the Japanese yen.

The current breather for the euro is unlikely to last, however. With the United States expected to see interest rate increases in the relatively near future (at least, sooner than originally expected), and economic improvements in many other regions, the euro is likely to remain one of the weaker players in Forex trading.

In fact, there are some who think that the euro could become a funding currency for the carry trade, much like the Japanese yen. With rates so low, and other countries expected to begin increasing rates, the euro could easily find a new role.

At 10:47 GMT EUR/USD is up to 1.2952 from the open at 1.2937. EUR/GBP is down to 0.8027 from the open at 0.8033. EUR/JPY is up to 138.0495 from the open at 137.3955.

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 Lower as ECB Members Praise Rate Cuts

By , September 9, 2014 8:01 am

Euro sign monumentEuro is mostly lower again today, dropping against its United States and United Kingdom counterparts, thanks to recent comments from ECB members. With rate cuts being supported as a way to stimulate the economy, the expectation of more easing is weighing on the euro.

There is a lot of support for a weaker euro right now, and that is leading to Forex traders going along with the programme. Ewald Nowotny and Sabine Lautenschlager, both involved with the ECB and monetary policy, expressed their support for the recent rate cut recently. On top of that, IMF Chief Christine Lagarde also shared the sentiment that she supported a weaker euro as a way to boost the economy.

Euro is also lower thanks in part to a change in investor confidence for the eurozone. Investor confidence dropped to -9.8, indicating that there are concerns about the situation. As long as the recovery is slow, there is a good chance that policymakers will attempt to weaken the 18-nation currency in an effort to kickstart the economy.

With rates already low, many are looking to the ECB to embark on other measures.

At 10:27 GMT EUR/USD is is down to 1.2891 from the open at 1.2895. EUR/GBP is down to 0.7996 from the open at 0.8007. EUR/JPY is up to 171.2050 from the open at 170.7675.

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 for Eight Week

By , September 6, 2014 8:08 pm

Euro sign monumentThe most important event this week turned out to be the monetary policy of the European Central Bank. Analysts expected it to be uneventful, but they were completely wrong. The resulting shock sent the euro down. While the currency managed to retain some of its gains versus the Great Britain pound by the weekend, it fell against most other major counterparts. It was euro’s eight week of losses versus the US dollar.

While market participants were expecting monetary easing from the ECB sometime in the future, they were not anticipating that the central bank would act so soon. The resulting shock sent the euro down against all other most-traded currencies, the reaction that was very likely welcomed by ECB President Mario Draghi, who wants to see the currency weaker.

Another shocker this week was the release of US non-farm payrolls. Economists were anticipating another month of robust employment growth, but the actual report was very disappointing. It allowed the euro to bounce halt decline and bounce a little, yet the impact of the data was not as strong as one might expect.

The sterling, another European currency, was even weaker than the euro due to the upcoming referendum about independence of Scotland.

EUR/USD sank from 1.3129 to 1.2951 (1.4 percent) this week. EUR/JPY fell from 136.78 to 136.10, retreating from the weekly high of 138.28. EUR/GBP rallied from 0.7925 to 0.7957 during the week but retreated to 0.7931 by the weekend.

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 Makes Small Gains

By , September 5, 2014 8:47 am

One euro coinEuro is eking out some small gains today, following yesterday’s huge drop against all major counterparts. Forex traders aren’t expecting much, though. The big shocker from the ECB is likely to result in general euro weakness for a while.

For months, Forex traders and other have been speculating about what the ECB would do to help boost the eurozone economy. Any move would, of course, weaken the euro, and Forex traders have been preparing for that. However, any move always seemed on the horizon.

Even after Mario Draghi‘s recent remarks in Jackson Hole, few analysts expected such direct action so soon. Yesterday’s rate cut, designed to penalize banks for holding the euro rather than making sure it gets into the economy, has transformed the euro into a funding currency.

It’s quite likely now that the euro will become part of carry trades — but on the other side. Euro is now cheap to borrow, and could be used to purchase higher-yielding assets. It looks as though the yen might have some serious competition.

For now, the euro is a little higher, but it’s still weak.

At 10:23 GMT EUR/USD is up to 1.2959 from the open at 1.2944. EUR/GBP is up to 0.7941 from the open at 0.7926. EUR/JPY is up to 136.2880 from the open at 136.2540.

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 on Policy Expectations

By , September 4, 2014 5:34 am

Various euro denominationsEuro is lower today, dropping as Forex traders look ahead to policy expectations from Mario Draghi and the European Central Bank. Many expect the ECB to embark on looser monetary policy, and that is weighing on the euro.

While the ECB might be quite ready to announce measures that would lead to a looser monetary policy, many expect things to head that direction quite soon. Indeed, even if Mario Draghi and other policymakers don’t implement further easing this month, many expect a better-fleshed-out plan about how and when easing is likely.

The result of this latest expectation is a weaker euro. The 18-nation currency has be struggling recently, and today the euro is down against most of its major counterparts. It’s not very surprising, given the expectations for policy divergence between the ECB and the Federal Reserve, which is expected to start tightening soon.

Also weighing on the euro are concerns about the situation in the periphery. Although some countries, like Spain, appear to be moving forward, there are still some issues and some holdover from the recent crisis.

At 10:27 GMT EUR/USD is down to 1.3140 from the open at 1.3150. EUR/GBP is down to 0.7984 from the open at 0.7989. EUR/JPY ha actually moved higher, up to 137.8300 from the open at 137.8030.

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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Another Weekly Decline for Euro on Easing Bets

By , August 30, 2014 8:32 am

Multiple euro banknotes and coinsThe euro experienced a very bad week, falling to the lowest level in almost a year against the US dollar, even though most other major currencies, including the Great Britain pound and the Japanese yen, were rallying versus the greenback.

The euro started the week soft as European Central Bank President Mario Draghi hinted last week at a possibility of another round of stimulus measures. While the German Finance Minister attempted to downplay easing expectations, poor economic indicators were not helping to convince traders that the ECB is not going to ease its monetary policy further. The central bank will conduct its next policy meeting on September 4.

Whatever the case will be, traders were selling the euro en masse. According to the weekly Commitments of Traders report, investors were increasing their short positions, while trimming long ones.

EUR/USD dropped from 1.3194 to 1.3139, touching the weekly low of 1.3133 — the weakest rate since September 6. EUR/JPY declined from 137.58 to 136.70. EUR/GBP sank 1 percent from 0.7969 to 0.7914.

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 Heads for Another Weekly Decline

By , August 29, 2014 5:20 am

Stack of one-euro coins on a chartEven though the euro is a little higher against some of its major counterparts, the 18-nation currency is headed for a weekly decline. The latest economic data confirms that rises in consumer prices continue to slow.

For the seventh week in a row, the euro is set for a weekly decline. This run of declines is the longest in more that 10 years. The latest economic data, focusing on consumer prices, was released earlier today. It looks as though another recession could be a real possibility, and that is impacting the euro.

Consumer prices rose 0.3 per cent year over year in August. However, the year over year increase in July was 0.4 per cent. This news means that things are slowing in the eurozone. The ECB likes to keep inflation at just below 2 per cent, so this is an issue from that standpoint as well.

There is speculation that the ECB will have to take more steps to stimulate the eurozone economy, and that doesn’t promise well for the euro, either. More details are awaited for next week, when policymakers meet and Mario Draghi makes an announcement about policy.

At 10:53 GMT EUR/USD is up to 1.3185 from the open at 1.3182. EUR/GBP is down to 0.7947 from the open at 0.7948. EUR/JPY is up to 137.1085 from the open at 136.7270.

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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