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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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Euro Loses Ground on Policy Expectations

By , November 11, 2014 6:15 am

Euro banknotes and coinsEuro is losing some ground on policy expectations today. Many expect that the eurozone will continue to struggle for a while, and that is putting the euro at a disadvantage against its other major counterparts.

Euro is struggling today against the dollar and the pound as policy expectations come into sharper focus. There are expectations that the Federal Reserve will start raising interest rates next year, and the Bank of England is also supposed to be getting ready to raise rates. Both the UK economy and the US economy have posted good news recently, while the eurozone continues to struggle. Lower commodity prices on gold and oil aren’t helping the euro cause, either.

The euro is doing better against the yen, though. However, that has more to do with yen weakness, and moves by policymakers in Japan, to keep the yen weak. For the most part, the euro can be expected retain its weakness against many of its major counterparts. There hasn’t been a lot of good news recently, and the ECB has already said it’s prepared to ease further.

At 12:01 GMT EUR/USD is down to 1.2415 from the open at 1.2422. EUR/GBP is down to 0.7824 from the open at 1.7837. EUR/JPY is up to 134.9150 form the open at 142.6500.

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 vs. Dollar on Back of Disappointing US Employment

By , November 7, 2014 12:25 pm

Euro sign monument with ECB on backgroundThe euro gained on the US dollar today after employment data from the United States missed analysts’ projections. The currency also rallied versus the Great Britain pound but was unable to advance against the Japanese yen.

US non-farm payrolls grew by 214,000 jobs in October. While not bad by itself, the figure was below market expectations. Yet at the same time the unemployment rate dropped to 5.8 percent, even though experts predicted that it would stay unchanged at 5.9 percent.

The worse-than-expected US data allowed the euro to halt its decline and to push back the dollar. Yet it is hard to believe that euro’s gains will last long, considering prospects for additional stimulus from the European Central Bank and tighter monetary policy from the Federal Reserve.

EUR/USD climbed from 1.2374 to 1.2434 as of 18:03 GMT today after touching 1.2357 — the lowest rate since August 2012. EUR/GBP jumped from 0.7814 to 0.7845. EUR/JPY traded at 142.58, close to its opening level of 142.55, after rising to 143.05.

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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