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
Bullish
GBP/USD
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
USD/JPY
Mixed
Gold
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
Oil - US Crude
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
Bitcoin
Mixed
More View more
Real Time News
  • RT @LiveSquawk: IMF, World Bank Rethinking April 17-19 Spring Meetings Due To Coronavirus Outbreak - RTRS
  • Trump: - Putting VP Mike Pence in charge of virus response (BBG)
  • Trump press conference: - Virus vaccine is coming along well - US is very very ready for [#coronavirus impact] (BBG)
  • Heads Up:🇳🇿 NZD ANZ Activity Outlook (FEB) due at 00:00 GMT (15min), Actual: N/A Expected: N/A Previous: 17.2 https://www.dailyfx.com/economic-calendar#2020-02-27
  • As Trump delivers a press conference on the #coronavirus, the #SP500 has broken under rising support from 2018 as the outlook risks turning further bearish, btw as anticipated from downside signals discussed in yesterday's session on trader psychology - https://t.co/RzZU7h5nQM https://t.co/tSQX1rxxNF
  • US President Donald Trump on Coronavirus: - Says he will back congress providing more funds for the virus (BBG)
  • US President Donald Trump speaks at White House on #Coronavirus: - Has just received briefing on #COVID19 - Risk to Americans from the virus is very low - Ready to adapt and do whatever is needed as the disease spreads (BBG)
  • The $NZD may bounce after hitting a four-month low against its US counterpart, but overall positioning continues to argue for a bearish bias. Get your NZD market update from @IlyaSpivak here:https://t.co/pip5LuUUJW https://t.co/lCOtFkrtBK
  • Furthermore, the #Euro 5Y5Y inflation swap forward is less than one third of a percent above its all-time low at 1.1688. Eurozone inflation expectations to start were not looking great, and the #coronavirus only made them gloomier. https://t.co/vvQYUuXQja https://t.co/fmpnmj4j0v
  • $USDJPY Daily Pivot Points: S3: 108.36 S2: 109.34 S1: 109.77 R1: 110.76 R2: 111.31 R3: 112.29 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
Forex: Euro Optimism Wanes, Sterling Weakness To Gather Pace

Forex: Euro Optimism Wanes, Sterling Weakness To Gather Pace

2011-12-06 14:50:00
David Song, Currency Strategist
Share:

Talking Points

  • Euro: German Sees Treaty Chance In 1H 2012, Bearish Pattern Still In Play
  • British Pound: BoE Warns Of Tightening Credit Ahead Of Rate Decision
  • U.S. Dollar: Struggles To Hold Ground, Fed Keeps Door Open For QE3

Euro: German Sees Treaty Chance In 1H 2012, Bearish Pattern Still In Play

The Euro bounced back during the overnight trade to reach a high of 1.3427 and the single currency may continue to gain ground ahead of the EU Summit as European policy makers increase their efforts to restore investor confidence. German Finance Minister Wolfgang Schaeuble said the new stability pact will be crucial goal for the EU, and went onto say that a treaty change could come about during the first-half of 2012 while speaking in Vienna.

As European policy makers increase their efforts to get their house in order, optimism surrounding the EU Summit should help to prop up the Euro, but the European Central Bank interest rate decision is likely to dampen the appeal of the single currency as we expect to see another rate cut in December. Indeed, recent comments from ECB board member Ewald Nowotny suggests that more asset purchases are on the horizon, but we may see President Mario Draghi move away from the nonstandard measures as the governments operating under the monetary union becoming increasingly reliant on monetary policy. In turn, the Euro is likely to face headwinds ahead of the EU Summit, and we may see the EUR/USD fall back towards the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3100 as it continues to trade within a downward trending channel.

British Pound: BoE Warns Of Tightening Credit Ahead Of Rate Decision

The British Pound struggled to hold its ground on Tuesday as the Bank of England held a cautious outlook for the banking sector, and we may see the central bank take additional steps to shield the U.K. economy as the region faces a slowing recovery. The BoE highlighted the ongoing turmoil in the financial system and said that credit conditions may tighten in 2012 should commercial banks struggle to raise capital. As the fundamental outlook deteriorates, the BoE is widely expected to expand monetary policy further over the coming months, but the MPC may stick to its current policy in December as the central bank continues to weigh the outlook for the region. As the GBP/USD struggles to push back above the 20-Day SMA at 1.5700, it seems as though we will see the pound-dollar give back the rebound from 1.5422, and the sterling may trade lower over the remainder of the year as the BoE keeps the door open to expand monetary policy further.

U.S. Dollar: Struggles To Hold Ground, Fed Keeps Door Open For QE3

The greenback pared the advance from the overnight trade, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) falling back from a high of 9,908, and the reserve currency may struggle to hold its ground throughout the North American session as market sentiment appears to be firming up. As the U.S. equity market opens higher, we may see a rise in risk-taking behavior, but the rebound in trader sentiment could be short-lived as the fundamental outlook for the world economy deteriorates. As Chicago Fed President Charles Evens talks up speculation for another large-scale asset purchase program, increased speculation for more quantitative easing could fuel risk appetite, and we may see market participants continue to move away from the reserve currency as they continue to treat the USD as a safe-haven.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Retrace The Advance From Earlier This Year? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

14:00

10:00

Fed's Tarullo Testifies at Senate Banking Committee

--

--

USD

14:00

10:00

IBD/TIPP Economic Optimism (DEC)

41.8

40.6

CAD

14:00

10:00

Ivey Purchasing Managers Index s.a. (NOV)

55.0

54.4

Currency

GMT

Release

Expected

Actual

Comments

GBP

23:01

BRC Sales Like-For-Like (YoY) (NOV)

-0.5%

-1.6%

Declines for the seventh time this year.

AUD

23:30

Current Account Balance (Australian Dollar) (3Q)

-5600M

-5637M

Deficit narrows for the second quarter.

AUD

23:30

Net Exports of GDP (3Q)

-0.6%

-0.6%

Contracts for the third quarter.

AUD

2:30

Reserve Bank of Australia Interest Rate Decision

4.25%

4.25%

Further easing ahead.

CHF

7:00

Foreign Currency Reserves (NOV)

--

229.3B

Narrows for second month.

CHF

7:15

Consumer Price Index (MoM) (NOV)

0.0%

-0.2%

Price growth contracts for the second consecutive month.

CHF

7:15

Consumer Price Index (YoY) (NOV)

-0.3%

-0.5%

CHF

7:15

CPI - EU Harmonised (MoM) (NOV)

--

-0.4%

CHF

7:15

CPI - EU Harmonised (YoY) (NOV)

--

-0.8%

EUR

9:00

Euro-Zone GDP s.a. (QoQ) (3Q P)

0.2%

0.2%

Economy grows 0.2% for the second consecutive quarter.

EUR

9:00

Euro-Zone GDP s.a. (YoY) (3Q P)

1.4%

1.4%

EUR

9:00

Euro-Zone Household Consumption (QoQ) (3Q P)

0.3%

0.3%

EUR

9:00

Euro-Zone Gross Fixed Capital (QoQ) (3Q P)

0.6%

0.1%

EUR

9:00

Euro-Zone Government Expenditure (QoQ) (3Q P)

0.1%

0.0%

EUR

10:00

German Factory Orders s.a. (MoM) (OCT)

1.0%

5.2%

Biggest rise since March 2010.

EUR

10:00

German Factory Orders n.s.a. (YoY) (OCT)

1.9%

5.4%

CAD

12:30

Building Permits (MoM) (OCT)

1.6%

11.9%

Largest advance since May.

CAD

13:00

Bank of Canada Interest Rate Decision

1.00%

1.00%

Strikes a balanced tone for policy.

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

DISCLOSURES

News & Analysis at your fingertips.