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Posts tagged: Euro

Euro Gains on Manufacturing Data

By , October 23, 2014 3:59 pm

1,200 eurosThe latest manufacturing data is in for the eurozone, and it’s more positive than expected. As a result, the euro is gaining ground against many of its counterparts. This might the news that the 18-nation currency region has been waiting for, since it signals that maybe another recession isn’t inevitable after all.

Today, a release of a Purchasing Managers’ Index for the eurozone shows that the situation has improved. PMI rose to 50.7 for October, which is an improvement over the predicted fall to 49.9. The reading remains above 50, which indicates expansion, and is generally considered a better thing for the economy. On top of that, factories in Germany are recovering from a slump last month.

The good news is also helped along by indications that Spain’s economic recovery is picking up steam. While Germany is the large economic driver for the euro region, the periphery has been dragging the eurozone down. Recovery by Spain could go a long way toward getting the periphery out of trouble and increasing the stability of the eurozone.

It’s little surprise that we’re seeing some risk appetite on this news, and that the euro is heading a little bit higher.

At 10:21 GMT EUR/USD is up to 1.2665 from the open at 1.2652. EUR/GBP is up to 0.7910 from the open at 0.7882. EUR/JPY is up to 136.1850 from the open at 135.5190.

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 Back After Rally

By , October 16, 2014 4:21 am

Euro banknotesEuro is falling back now, falling a rally that took place yesterday and in earlier trading. Euro surged higher, especially against the US dollar and the Japanese yen, earlier, but now things are changing. Concerns about risk are back on the table, and lower commodity prices are having their impact.

Euro got a boost earlier, thanks to US economic data that disappointed. High beta currencies surged on the news, and the greenback plummeted. That’s all changing now, thanks to the fact risk aversion is high, and there just isn’t much to support the euro.

Yes, US economic data was disappointing. But the eurozone data is worse, and policymakers worry that they are staring down a triple dip recession. Not only that, but commodities continue to do poorly. The euro is often supported when gold prices are, and gold has been struggling lately. The recent difficulties for oil are not helping.

Risk aversion is also high. Stocks are down around the world, and there are worries about continued unrest in the Middle East, and every now and then someone remembers Russia, which continues to worry Europe.

At 10:48 GMT EUR/USD is down to 1.2727 from the open at 1.2838. EUR/GBP is down to 0.7960 from the open at 0.8013. EUR/JPY is down to 134.5680 from the open at 135.9830.

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 as Germany Cuts Growth Forecast

By , October 15, 2014 3:54 am

One euro coinEuro is losing ground against some of its counterparts as the latest economic data is released throughout the 18-nation currency zone. Even though Germany’s CPI reading met expectations, the country had to slash its growth forecast.

The latest CPI data out of Germany indicates that inflation remains at 0.8 per cent month-to-month. This was an expected reading, so it’s not out of character and has little bearing on the euro’s performance today.

However, the news that policymakers have lowered the growth forecast for Germany is a different story. Germany is revising its expectations to 1.2 per cent annual growth for 2014 and for 2015. This is a change from an expected 1.8 per cent for 2014 and 2.0 per cent for 2015.

With this change in growth forecast for Germany, it is apparent that the rest of the eurozone could be affected, since Germany is the largest economy in the 18-nation currency region, and generally considered the economic leader. The news is weighing a bit on the euro, causing it to fall against the dollar and the pound, which are both poised for more positive changes in the near term.

At 10:25 GMT EUR/USD is down to 1.2645 from the open at 1.2648. EUR/GBP is down to 0.7937 from the open at 0.7959. EUR/JPY is up to 135.6620 from the open at 135.5100.

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 Receives Respite

By , October 13, 2014 5:36 am

A fan of 500-euro billsEuro is heading higher against many of its major counterparts today, gaining ground as a respite from recent difficulties. Once again, the ECB is promising to do what it takes to keep the eurozone afloat, and that is providing at least some support for the 18-nation currency.

Recently, the euro area was pegged as the weakest economic segment in the world economy, and leaders encouraged to do what they can to stimulate growth. In the past, ECB policymakers have pledged to keep the eurozone afloat, and do what it takes to preserve the euro, and it appears that no country seriously wants out right now.

As a result, the euro is getting a little bit of support in Forex trading, making some gains against its major counterparts. These gains, however, might be short-lived. ECB Governing Council member Ewald Nowotny indicated that the euro is likely to weaken further as policymakers attempt to stimulate the eurozone economy.

And there might need to be a lot of stimulus, since in-fighting amongst member countries about austerity vs. exports and with Germany throwing its weight around, there’s not a lot of other help for the eurozone economy.

At 10:57 GMT EUR/USD is up to 1.2685 from the open at 1.2632. EUR/GBP is up to 0.7880 from the open at 0.7858. EUR/JPY is up to 136.2070 from the open at 135.8400.

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 Comments Bring Euro Down

By , October 10, 2014 4:09 am

Euro sign monument with ECB on backgroundOnce again, Mario Draghi is a bit of a downer. His remarks yesterday at the Brookings Institution are dragging on the euro, since they indicate that the ECB is ready to double-down on stimulus measures likely to weigh on the 18-nation currency.

Yesterday, ECB President Mario Draghi spoke at the Brookings Institution about what’s next for the euro and the eurozone. He is mentioned that the ECB remains committed to helping to stimulate the flagging eurozone economy, and that it would do whatever is necessary to make that happen — no matter what the balance sheet looks like in the end.

Draghi also predicted that the eurozone would be in a place that the ECB could start increasing interest rates in 2017. It’s no surprise that Goldman Sachs lowered its forecasted rate for the EUR/USD, and that the euro is heading lower against the US dollar today.

There isn’t a whole lot left for policymakers in the eurozone to try, and their last, best hope is to use the 18-nation currency as a kind of lever to try to get the economy moving again.

At 10:22 GMT EUR/USD is down to 1.2664 from the open at 1.2711. EUR/GBP is up to 0.7890 from the open at 0.7879. EUR/JPY is down to 136.37 from the open at 136.93.

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

Forex News

Euro Struggles Against Fundamentals to Rally

By , October 8, 2014 8:38 am

20-euro bill and the map of EuropeWhile the euro was rising earlier today, the shared 18-nation currency has a hard time keeping its gains and was falling against the US dollar, though it trades near the opening level as of now. It is not surprising to see softness of the euro considering that fundamentals were playing against the currency of the eurozone.

There were plenty of reasons for the euro to fall. The major one was yesterday’s growth outlook from the International Monetary Fund as the IMF lowered projections for eurozone economic growth both for 2014 and 2015. The decline of German’s industrial production was another negative factor for the currency.

So why the euro was able to halt its decline even as fundamentals are unfavorable to the currency? One of the possible reasons is that the currency is too oversold and needs a period of consolidation before another thrust down. Yet some analysts argue that the euro may have a period of sideways trading or perhaps even a rally in case the Federal Reserve minutes released today show that US policy makers are not in a hurry to raise interest rates.

EUR/USD dropped from 1.2669 to 1.2623 before trading at 1.2678 as of 13:07 GMT today. EUR/JPY was up from 136.85 to 136.93, while EUR/GBP traded near the opening rate of 0.7870.

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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Manufacturing Data Boosts Pound Against Euro

By , October 7, 2014 5:25 am

Banknotes of 5, 10 and 20 poundsUK pound is heading higher against the euro today, even though it is down against its low-beta counterparts, the dollar and then yen. Economic divergence is one of the reasons that the pound is doing so well against the euro today.

The latest data to come out of the United Kingdom is manufacturing production. This measure rose by 0.1 per cent from July to August, according to the Office for National Statistics. Compare this to the latest data from Germany, which points to lower output.

With the divergence in economic data, the United Kingdom has the upper hand against the eurozone. However, the pound is still struggling against the US dollar and the Japanese yen. Even though the situation is improving in the United Kingdom, it’s still not improving as quickly as thing are improving in the United States.

Plus, the UK pound has a problem in terms of uncertainty. While the UK economy is doing well as compared to what’s happening in the eurozone, and while it’s recovering better than initially estimated, the reality is that the US economy is still recovering better.

At 10:33 GMT GBP/USD is down to 1.6049 from the open at 1.6083. EUR/GBP is down to 0.7842 from the open at 0.7868. GBP/JPY is down to 174.4860 from the open at 174.9550.

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

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Euro Runs to Upside, Ignoring Negative Fundamentals

By , October 6, 2014 1:04 pm

Counting 50-euro billsThe euro climbed today even though the European macroeconomic indicators were rather unfavorable. The broad-based weakness of the US dollar was the major reason for the rally of the shared 18-nation currency.

Today’s macroeconomic indicators were very negative, adding to evidences of Europe’s economic struggle. German factory orders contracted 5.7 percent in August. The Markit Eurozone Retail Purchasing Managers’ Index fell from 45.8 in August to 44.8 in September, demonstrating the sharpest decline of the sector since April 2013. The Sentix Investor Confidence index for the eurozone declined from -9.8 in September to -13.7 in October.

Despite all the negative data, the euro demonstrated a moderate bounce today following the big slump on Friday. The common eurozone currency joined other currencies in a rally after the dollar halted its run to the upside, while absence of additional quantitative easing from the European Central Bank was also playing in favor of the euro.

EUR/USD advanced 1.1 percent to 1.2645 as of 19:58 GMT today after falling 1.2 percent on Friday. EUR/JPY climbed from 137.28 to 137.61, and EUR/GBP rose from 0.7839 to 0.7867.

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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Euro Falls for 12th Week

By , October 4, 2014 12:05 pm

Counting 50-euro billsIt was another poor trading week for the euro, which fell for the 12th straight week and reached a new multi-year low against the US dollar. While the European Central Bank policy announcement provided moderate support for the shared 18-nation currency, employment data from the United States did not allow the euro to hold onto gains.

The European Central Bank stayed put, preferring not to ease its monetary policy further. This decision led to a rally of the euro against other majors. Yet the rally was short-lived as better-than-expected non-farm payrolls drove the common eurozone currency down to new lows versus the dollar.

While the euro ended the week soft, the weakest currency was the Great Britain pound. Poor economic indicators suggested that the Bank of England will not be able to raise interest rates as soon as was expected, reducing the appeal of the sterling.

EUR/USD dropped from 1.2682 to 1.2511 (1.4 percent) to the weakest weekly close since August 2012. EUR/JPY declined from 138.60 to 137.36. At the same time, EUR/GBP advanced from 0.7809 to 0.7832, bouncing from the weekly low of 0.7766 — the lowest level since July 22.

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 Can’t Maintain Gains Against Greenback

By , October 3, 2014 8:56 am

Euro sign monumentWhile the euro is maintaining its recent gains against some of its counterparts, the 18-nation currency is losing ground to the US dollar. Thanks to continued policy divergence and weaker gold prices, there is little to support the euro against the greenback.

Yesterday, the euro got a bit of a boost against the US dollar when ECB President Mario Draghi was vague about plans to buy private debt and ramp up easing. Today, even though the euro is still higher against some of its major counterparts, the 18-nation currency is dropping against the dollar again.

Concerns about what’s next for the eurozone economy continue to weigh. Earlier today, Draghi pointed out that there are a lot of difficulties in the eurozone right now. While enumerating the difficulties, he also said he understands why many people living in the currency region are frustrated with the euro.

Lower gold prices are also not helping the euro’s cause. Often, the euro moves with gold prices, since gold moves inversely to the US dollar. With gold dropping, there is little to support the euro against the dollar.

At 10:47 GMT EUR/USD is down to 1.2619 from the open at 1.2669. EUR/GBP is higher, gaining to 0.7850 from the open at 0.7847. EUR/JPY is up to 137.5150 from the open at 137.3520.

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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