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.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
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
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • RT @FirstSquawk: Five rockets hit near US embassy in Iraq capital: security source
  • #DidYouKnow crude #oil is a natural resource that differs in composition depending on its location. Find out more crude oil facts from @WVenketas here: https://t.co/Ssp486xz2J #OOTT #CommoditieswithDailyFX https://t.co/NVBR5kbYgb
  • The $JPY may resume a five-year rise against the New Zealand Dollar if prices make good on a Head-and-Shoulders pattern, pushing NZD/JPY toward 70.00. Get your market update from @ddubrovskyFX here: https://t.co/DXPkAjLoLp https://t.co/nyi5fDamr8
  • RT @RaoulGMI: Thanks Fitwit! Lots of great, smart ideas of playing the downgrades of BBB. The collective hive mind is truly incredible and…
  • transmissibility is increasing — news flow hasn’t been kind over the weekend — should be an interesting globex open #CoronavirusOutbreak https://t.co/UZYoZOQZ7V
  • The #Euro may be preparing to turn lower against the Japanese Yen, resuming a two-year downtrend and setting the stage for a decent below the 111.00 figure. Get your market update from @IlyaSpivak here: https://t.co/jtjJ1H2eRi https://t.co/epncUWJTSo
  • The $JPY has faded into 2020 as market risk appetite has held up and hit demand for haven assets. USD/JPY now challenges a key medium-term downtrend, but hasn’t topped it yet. Get your market update from @DavidCottleFX here:https://t.co/4X6vgCgkB7 https://t.co/bLWABxibOo
  • My pleasure! https://t.co/R7ArKNjCNO
  • The range in USD/CAD broke with aggression this week as CAD sellers pushed the currency after the Bank of Canada rate decision. Get your $USDCAD technical analysis from @JStanleyFX here: https://t.co/8oHoLLqvtR https://t.co/8ZXx6GbKAn
  • The $USD may fall against the Swedish Krona and Norwegian Krone if commentary from officials at the Davos forum uplift market mood and pressure haven-linked currencies. Get your market update from @ZabelinDimitri here: https://t.co/CPmNJSgHXY https://t.co/RdM0cbyfSf
Euro’s Southern Journey Destined for Fresh Yearly Low, British Pound Extends Two Day Decline

Euro’s Southern Journey Destined for Fresh Yearly Low, British Pound Extends Two Day Decline

2010-05-04 10:46:00
Michael Wright, Currency Analyst
Share:

Talking Points
•    Japanese Yen: Strengthens Against Most Major Currencies
•    Pound: Maintains Range Ahead of Thursday’s Election
•    Euro: Weakens the Most in Four Days  Amid German Official Comments
•    U.S. Dollar: ABC Consumer Confidence, Pending Home Sales on Tap

Euro’s Southern Journey Destined for Fresh Yearly Low, British Pound Extends Two Day Decline


Also weighing on the euro is Luxembourg’s announcement that it plans to issue a 2 billion euro bond this month, with the statment followed by ECB’s Merch saying that “it may not be the best time for a sovereign to come out.” Indeed, many bankers and traders will concur with Merch as the speculation mill continues to churn as investors believe that the $146 billion life line awarded to Greece over the weekend will not be successful to stem the crisis from spreading to its euro-area members.

At the same time, European Central Bank Council member, Erkki Liikanen said “hopefully” cooperation in the euro area strengthens as a result of the Greek crisis, and went onto say that “Economic and Monetary Affairs Commissioner Oilli Rehn is working to increase economic policy coordination and I support him.” Furthermore,  ECB’s council member Yves Merch publicized that President Jean-Claude Trichet has been “totally consistent” on the back’s collateral rules, and had to change its rules to ensure that Greece’s bonds would continue to be eligible as collateral. Nevertheless, the economic docket during the European session showed that European producer prices in March advanced for the first time in more than a year as companies passed on the burden of higher costs as the economy strengthen, with figures showing the annualized rate climbing 0.9%, which was in line with economists’ expectations.  On the other hand, a separate report illustrated that retail sales in Europe’s largest economy unexpectedly retreated 2.4% in March after rising a revised 1.1% the previous month. Looking ahead, the ECB is likely to postpone withdrawing economic stimulus measures as Greece’s debt crisis and the risk of growth in the region lead governments to cut their budget deficits.

The British pound extended its two day decline to reach an overnight low of 1.5169 as the GBP/USD has worked its way trade into congestion since mid last week. The pair may continue its decline ahead of Thursday’s election as market participants see a risk for a hung parliament following former British finance minister Nigel Lawson stating that “the prospect of a hung parliament is already priced into the markets” last Friday. Taking a look at the economic docket overnight, mortgage approvals rose for the first time in four months as property taxes lightened. Figures showed that lenders granted   48.9K loans, which was up from 46.9K in February, however was still shy of economists’ forecasts of 49.0K. At the same time, net consumer credit in March was 0.3B from a revised 0.6B the month prior, while the final reading of the M4 money supply (broad money – cash outside of banks) in March added an annualized 5.9%.  The readings paint a somewhat improved outlook for the housing market as it looks to slowly recover in the midst of households adding to their unsecured debt.   Looking ahead, investors are weighing in a 3% chance that the Bank of England will increase their key overnight lending rate 25 basis points at its rate decision meeting on May 10th, while forecasting rates to jump 52.7 basis points over the next 12 months, according to the Credit Suisse gauge of rate hike expectations.

The greenback rallied across the board, while the Aussie was down against all major currencies as risk appetite picked up during the last 24 hours. The U.S. dollar is likely to gain momentum going into the U.S. trade as the world’s largest economy is expected to show that pending home sales advanced 5.0% in March from the month prior, with the reading climbing 19.5% from a year ago.  At the same time, ABC consumer confidence and factory orders are also on tap.

Do You Expect the EUR/USD to Maintain Its Current Range Over the Following Month? Join us in the Forum

Related Articles: 

Forex Weekly Trading Forecast – 05.03.10


To discuss this report contact Michael Wright, Currency Analyst: instructor@dailyfx.com

mb05.04

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

DISCLOSURES

News & Analysis at your fingertips.