- Overnight Interest Rate Update 03.18.10 Thu, 18 Mar 2010 10:37 GMT
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- Saturday, 17 October 2009 00:08:56 GMT Euro Near Major Top Against US Dollar, but Timing Anything but Clear
- Friday, 16 October 2009 23:25:32 GMT US Dollar May Be Setting Stage for Advance
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- Friday, 09 October 2009 23:07:02 GMT Euro Could Succumb to ECB's Neutral Stance, Weak Data
- Friday, 09 October 2009 21:33:45 GMT Euro Ends Week Just Above 1.4700 as German Trade Surplus Narrows
- Friday, 09 October 2009 02:23:25 GMT German Current Account Set to Narrow in August
- Thursday, 08 October 2009 23:31:21 GMT Euro Looks like it May End up a Laggard in the Rate Game Given the ECB's Stance
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- Wednesday, 07 October 2009 21:15:48 GMT Euro Down as Q2 GDP Gets Revised Lower - European Central Bank Decision on Thursday
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- Monday, 05 October 2009 03:52:22 GMT Euro Zone Investor Confidence to Hit 14-Month High But Markets May Not Notice
- Monday, 05 October 2009 02:38:33 GMT Euro Zone Retail Sales to Shrink for Second Month in August
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- Friday, 02 October 2009 21:38:58 GMT US Dollar Forecast for Recovery Will be Put to the Test
- Wednesday, 30 September 2009 23:15:36 GMT German Retail Sales to Shrink for Fourth Month, Outlook Remains Bleak
- Wednesday, 30 September 2009 20:07:43 GMT US Dollar Down Despite Q2 GDP Revision - Testimony from Fed Chairman Bernanke on Thursday
- Wednesday, 30 September 2009 00:28:00 GMT Euro Growth Outlook Bolstered by Retail Activity, Confidence but Market Little Impressed
Euro Interest Rate Bias: Bearish
European interest rate forecasts have clearly weighed on the Euro/US dollar exchange rate, as expectations for European Central Bank interest rates cuts leave the euro at a disadvantage against its US counterpart. The difference between short-term Euro interest rates (3-month EURIBOR) and longer-term yields (2-year swap rates) now stands at 21 basis points in favor of the short end of the curve—indicating that traders expect rates to drop through the medium term. This stands in stark contrast to just three months earlier, when that same spread hit highs of over 50 basis points on market forecasts that the European central Bank would continue raising its short-term interest rate target.
Given bearish forecasts for euro yields and comparatively bullish expectations out of the US economy, our medium-term fundamental bias remains bearish for the EUR/USD forex pair.
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