News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: 0.01% 🇨🇭CHF: -0.03% 🇬🇧GBP: -0.04% 🇯🇵JPY: -0.11% 🇦🇺AUD: -0.19% 🇳🇿NZD: -0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/VAKvRq8IX7
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.33% US 500: 0.14% Wall Street: 0.10% France 40: -0.25% Germany 30: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/dZyZx2pzQy
  • The Dollar is proving more responsive to fundamentals than risk assets like the S&P 500. Will Friday NFPs push $EURUSD above the midpoint of its historical range? My article and video for Friday: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/04/EURUSD-Faces-Its-Historical-Range-Midpoint-as-Resistance-with-Dollar-Sliding-Into-NFPs.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/98OsWsb7ik
  • RBI sees FY21 GDP at -7.5% versus -9.5% prior -BBG
  • RBI's Das: RBI stands ready for more liquidity access measures, RBI taking measures for dampening volatility -BBG
  • @ZabelinDimitri https://t.co/G0vkDoZnAy
  • RBI's Das: Recovery signs are far from broad-based, MPC will monitor all threats to price stability. Near term financial risks contained -BBG
  • RBI Governor Das: To continue with accommodative stance this year and next, inflation likely to remain elevated -BBG
  • 🇮🇳 RBI Interest Rate Decision Actual: 4% Expected: 4% Previous: 4% https://www.dailyfx.com/economic-calendar#2020-12-04
  • The Swiss Franc may continue higher against the US Dollar as technical pressure favors USD/CHF bears. .Get your market update from @FxWestwater here:https://t.co/yqJbbhAWiu https://t.co/1lJ7ytFqdw
British Pound and Euro Pace Losses Ahead of Central Bank Meetings

British Pound and Euro Pace Losses Ahead of Central Bank Meetings

2012-01-11 14:37:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Fundamental Headlines

CFTC May Vote on Derivative Rules for Munis – Bloomberg

Regulators May Expand Definition of ‘Too-Big-to-Fail’ – Bloomberg

ECB Must do More to Prevent Euro Collapse: Fitch – Reuters

German Economy Contracted at End of 2011 – WSJ

Monti, Merkel Talks Focus on Growth – WSJ

European Session Summary

The rally by higher yielding currencies and risk-correlated assets that has taken place since European pre-market hours on Monday hit a snag on Wednesday, after a myriad of disappointing data from across Europe suggested 2012 would be a difficult year, regardless of the Euro-zone crisis. Data showed that the United Kingdom’s trade deficit rose more than expected, while shop-price inflation slowed to its lowest rate in sixteen months. The British economy is stagflating, which has stoked speculation that the Bank of England may be forced to inject more stimulus, dragging down the Pound.

Moving to the continent itself, Germany’s statistics office announced that growth had contracted by almost 0.3 percent, ending a two year growth streak. A second consecutive quarter of contraction would pull the German economy into a recession, suggesting that if Europe’s strongest economy has trouble staying afloat, then the periphery will almost certainly post negative growth figures in the quarters ahead.

GBP/USD 5-min Chart: January 11, 2012

British_Pound_and_Euro_Pace_Losses_Ahead_of_Central_Bank_Meetings_body_Picture_1.png, British Pound and Euro Pace Losses Ahead of Central Bank Meetings

Charts created using Strategy Trader– Prepared by Christopher Vecchio

Overall, the British Pound and the Euro led declines among the majors on Wednesday, with the U.S. Dollar and the Japanese Yen as the top performers, respectively. The commodity currencies remained firmer than their European counterparts, as both energy (oil) and precious metals (gold) have ticked higher in recent days. While part of this can be attributed to Iranian saber rattling (oil), the European Central Bank’s increasingly dovish monetary policy stance has boosted market liquidity, aiding the carry trade and risk-appetite.

Tomorrow’s rate decisions are particularly important, considering both the BOE and ECB are rumored to be considering expanding their stimulus packages, in the form of lower rates or further liquidity injections, or both. While lower rates would help support risk taking by market participants, both the British Pound and the Euro would face downside pressure against the U.S. Dollar, as the interest rate differential between those currencies and the Greenback would slide further in favor of the world’s reserve currency.

24-Hour Price Action

British_Pound_and_Euro_Pace_Losses_Ahead_of_Central_Bank_Meetings_body_Picture_10.png, British Pound and Euro Pace Losses Ahead of Central Bank MeetingsBritish_Pound_and_Euro_Pace_Losses_Ahead_of_Central_Bank_Meetings_body_Picture_4.png, British Pound and Euro Pace Losses Ahead of Central Bank Meetings

Key Levels: 14:00 GMT

British_Pound_and_Euro_Pace_Losses_Ahead_of_Central_Bank_Meetings_body_Picture_7.png, British Pound and Euro Pace Losses Ahead of Central Bank Meetings

Thus far, on Wednesday, the Dow Jones FXCM Dollar Index is higher, trading at 10007.19, at the time this report was written, after opening at 9966.30. The index has traded mostly higher, with the high at 10016.04 and the low at 9960.99.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com.

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to cvecchio@dailyfx.com.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES