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Rate Hike Prospects and Higher Yields Boosts Euro Against the US Dollar
Tuesday, 10 April 2007 21:26:09 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
- Wednesday, 14 October 2009 20:50:00 GMT Euro Rally Toward 1.50 Continues as Industrial Output Rises for Fourth Month
- Monday, 12 October 2009 20:05:09 GMT Euro Ends Week Just Above 1.4700 as German Trade Surplus Narrows
- Saturday, 10 October 2009 02:24:05 GMT US Dollar: At the Mercy of Risk Appetite...or is It?
- 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
- Thursday, 08 October 2009 23:30:39 GMT US Dollar and Dow on the Verge of Opposing Breaks
- Wednesday, 07 October 2009 21:15:48 GMT Euro Down as Q2 GDP Gets Revised Lower - European Central Bank Decision on Thursday
- Tuesday, 06 October 2009 17:45:40 GMT Euro US Dollar Exchange Rate Forecast
- Monday, 05 October 2009 19:42:00 GMT Euro Mostly Higher as Services PMI Signals Expansion for First Time Since May 2008
- 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
- Saturday, 03 October 2009 02:35:09 GMT Euro: Will Risk Appetite Hold EURUSD Up or Will the ECB Ease a Break?
- 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
The Euro staged a strong rally against the US dollar today and we are sure that the prospect of a rate hike and higher yield played a major role in the currency’s strength. EUR/JPY hit the highest level since the introduction of the Euro and in order to achieve such strength, we needed to see some EUR/USD buying as well. Economic data released overnight did not add to the move or take away from it. The German trade surplus narrowed more than expected in the month of February, while growth in French industrial production beat expectations. With nothing of consequence on the Eurozone economic calendar tomorrow, we expect traders to turn their focus to this week’s biggest event risk, which is Thursday’s ECB rate decision. The central bank is not expected to change rates, but as we mentioned yesterday, what the market is really looking for is his language at the accompanying press conference. Prior to the March rate hike, he introduced the words “strong vigilance” back into his vocabulary and the market took the EUR/USD from 1.3025 to 1.33 as a result. If the word reappears Thursday, we could see the EUR/USD test its all time high of 1.3667. If it doesn’t, then the market will question whether a rate hike will be delayed until June or if the central bank is planning to make a May hike its last. Either way, this is not positive for the Euro and could be what puts an end to the currency pair’s recent rally. Meanwhile, yesterday we talked about how prior extension moves in EUR/CHF have ended after the ninth trading day. We have seen this statistical significance holds once again as the currency pair ended its nine day long rally on the back of strong unemployment figures today. The unemployment rate fell to 3.0 percent in the month of March from 3.2 percent in February.
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