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
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.41%, while traders in Wall Street are at opposite extremes with 73.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/8KhdKttaUT
  • Cyclical and non-cyclical stocks can help diversify a trader’s equity portfolio. Get your guide to understanding these stocks here: https://t.co/h7BKTd2J8N https://t.co/0lYdB9y82G
  • 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
Euro Remains Weak After Downgrades; Credit Flashes Safety

Euro Remains Weak After Downgrades; Credit Flashes Safety

2012-01-16 14:45:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Fundamental Headlines

Europe Bank Dividends Poised to Tumble – Bloomberg

Greek Debt Swap Faces ‘Critical’ Phase in Talks – Bloomberg

S&P Downgrade May Spark Tougher EU Ratings Curbs – Reuters

Bailout Fund’s Borrowing Costs Rise – WSJ

Currencies Lure Traders as Investment Proxy – WSJ

European Session Summary

Markets were calm to start the week, as expected, given the Federal holiday in the United States that has markets closed on Monday. Trading in the Asian and European sessions was relatively calm, with higher yielding currencies and risk-correlated assets taking a dive upon market open before turning around ahead of trading in London. Overall, at the time this report was written, it appears that investors are rotating capital back into high grade credit, including French bonds (now with a split rating like the United States), as faith in the Euro appears to be waning.

As per recent CFTC Commitment of Traders (COT) data, net-short Euro non-commercial positioning has reached an all-time high. That is to say, in light of recent developments, market participants remain heavily short the Euro, and it appears that this trade is very crowded; further downside pressure is limited unless the European Central Bank continues to devalue the Euro through its backdoor refinancing operations with banks that have been quietly conducted over the past several weeks.

EUR/USD 5-min Chart: January 16, 2012

Euro_Remains_Weak_After_Downgrades_Credit_Flashes_Safety_body_Picture_10.png, Euro Remains Weak After Downgrades; Credit Flashes Safety

Charts created using Strategy Trader– Prepared by Christopher Vecchio

Overall, the European currencies continued to lag their counterparts, with the Euro and the Swiss Franc posting the second and third worst performances on Monday against the U.S. Dollar. The New Zealand Dollar was actually the worst performer, at the time this report was written, even as the Australian Dollar hovered near unchanged on the day versus the Greenback.

With the European sovereign downgrades out of the way, for now, market participants should keep an eye on the Greek debt swap negotiations, as a failure to reach agreement with the Institute of International Finance (IIF) – a group that serves as nothing more than a lobby for the banking sector – could result in a default by the end of March. Greek politicians have to be concerned with the stress this deal would place on their citizens, with the social paradigm shifting towards a more fractured, volatile society in recent months. The question is and has always been: is staying in the Euro-zone worth the social costs? We will find out the answer in short-order.

24-Hour Price Action

Euro_Remains_Weak_After_Downgrades_Credit_Flashes_Safety_body_Picture_1.png, Euro Remains Weak After Downgrades; Credit Flashes SafetyEuro_Remains_Weak_After_Downgrades_Credit_Flashes_Safety_body_Picture_7.png, Euro Remains Weak After Downgrades; Credit Flashes Safety

Key Levels: 14:10 GMT

Euro_Remains_Weak_After_Downgrades_Credit_Flashes_Safety_body_Picture_4.png, Euro Remains Weak After Downgrades; Credit Flashes Safety

Thus far, on Monday, the Dow Jones FXCM Dollar Index is slightly lower, trading at 10004.64, at the time this report was written, after opening at 10023.57. The index has traded mostly higher, with the high at 10038.19 and the low at 10000.26.

--- 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