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
Oil - US Crude
Bearish
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
Bearish
GBP/USD
Bullish
USD/JPY
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
More View more
Real Time News
  • Japanese Economy Minister Nishimura says a state of emergency is no longer needed in nay region of the country - BBG #Coronavirus #JPY
  • $gld prices may face heightened liquidation pressure as US-China tensions over Hong Kong heat up ahead of US GDP data amid the coronavirus pandemic. Get your $XAUUSD market update from @ZabelinDimitri here: https://t.co/vmoJXC2KSm https://t.co/dNGB1d0T9C
  • Slightly risk-on start to the beginning of the week. #AUD up with APAC stocks and #SPX index futures, anti-risk #JPY and #USD broadly lower https://t.co/P07MrhWHPe
  • Market snapshot: US equity futures pointing higher while FX markets remain mixed
  • (Asia AM) The #SP500 shrugged off risk aversion to end last week higher, but upside momentum seems to be fading. US markets are offline today, raising the risk of volatility - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/05/24/SP-500-Struggling-at-Resistance-Volatility-Risk-Ahead-Elevated.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/RJXBa0tyS5
  • LIVE NOW: In this session, Strategist @DavidJSong will discuss trading strategies for the top event risk in the week ahead https://www.dailyfx.com/webinars/175202251
  • LIVE IN 30 MIN: In this session, Strategist @DavidJSong will discuss trading strategies for the top event risk in the week ahead https://www.dailyfx.com/webinars/175202251
  • The possibility of a Covid-19 cure by year end keeps market sentiment high despite ongoing political tensions. Get your $USDMXN market update from @HathornSabin here: https://t.co/6DIf6krA3E https://t.co/IxeRbjHpQm
  • Join analyst @DavidJSong at 6:30 PM ET/10:30 PM GMT for your weekly update on key news trading events. Register here: https://t.co/gBlrRpCc55 https://t.co/qqWZkK1G8B
  • The commodity currencies, AUD, CAD, and NZD, which typically benefit from their higher yield profile relative to other currencies (the carry trade), no longer hold this advantage. Get your #currencies market update from @CVecchioFX here: https://t.co/3oWXhp0hCX https://t.co/qOgXnf0JKK
Euro Targets Fresh 2012 Lows, ECB To Endorse Further Rate Cuts

Euro Targets Fresh 2012 Lows, ECB To Endorse Further Rate Cuts

2012-07-10 12:50:00
David Song, Strategist
Share:

Talking Points

  • Euro: Spain To Tap EUR 30B By End Of July, ECB Talks Down Bond Purchases
  • British Pound: BoE Governor King Casts Weakened Outlook For U.K.
  • U.S. Dollar: Maintains Range-Bounce Prices Ahead Of FOMC Minutes

Euro: Spain To Tap EUR 30B By End Of July, ECB Talks Down Bond Purchases

The Euro held a narrow range during the overnight trade even as European policy makers agreed to expedite the EUR 100B bailout for Spain, and we may see the single currency face additional headwinds over the near-term as the fundamental outlook for the region continues to deteriorate. Indeed, the governments operating under the fixed-exchange rate system said they would make EUR 30B available to Spain by the end of the month, while Greek Finance Minister Yannis Stournaras called for ‘an intermediate solution’ to the debt crisis as the economic downturn in the region appears to be worse than expected.

In response, European Central Bank board member Christian Noyer argued that the region needs to ‘restore investor confidence durably,’ but went onto say that it’s bond purchase program can only ‘ease market turbulence temporarily’ while speaking in Paris. In light of the fresh batch of central bank rhetoric, it seems as though the Governing Council will continue to utilized the benchmark interest rate to address the downside risks surrounding the region, but the central bank may have little choice but to further embark on its non-standard measures as the heightening risk for contagion continues to dampen the outlook for the region. As the downward trending channel in the EURUSD continues to take shape, the near-term bias remains bearish, but we will keep a close eye on the relative strength index as it approaches oversold territory. Nevertheless, as headlines coming out of the euro-area fail to prop up investor confidence, we are likely to see fresh yearly lows in the days ahead, and we may see the EURUSD fall back towards the 1.2200 figure to test for psychological support.

British Pound: BoE Governor King Casts Weakened Outlook For U.K.

The British Pound failed to maintain the overnight advance to 1.5548 as Bank of England Governor Mervyn King struck dovish tone for monetary policy, and the GBPUSD may continue to retrace the rebound from 1.5268 as the central bank continues to carry out its easing cycle. Indeed, it seems as though Mr. King is turning increasingly downbeat towards the economy as the region remains in a technical recession, and we may see the central bank head call for additional monetary support as the debt crisis continues to cloud the fundamental outlook for the U.K. However, as the GBPUSD continues to trade above the 1.5450 figure, we may see the pair track sideways ahead of the BoE Minutes due out next week, and the official statement should set the tone for the remainder of the month as market participants weigh the outlook for monetary policy.

U.S. Dollar: Maintains Range-Bounce Prices Ahead Of FOMC Minutes

The greenback is bouncing back ahead of the North American trade, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) retracing the overnight decline to 10,136, and the reserve currency may appreciate further over the next 24-hours of trading as the rebound in risk-taking behavior appears to be tapering off. However, as the FOMC Minutes come into focus, we may see the dollar continue to consolidate within the narrow range carried over from the previous month, and a fresh batch of central bank rhetoric should set the tone for the remainder of the week as the Fed appears to be moving away from quantitative easing. Should the policy statement curb expectations for QE3, the development would certainly increase the appeal of the greenback, but we may see the committee leave the door open to expand monetary policy further in order to combat the slowing recovery.

--- 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 Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

CAD

12:15

8:15

Housing Starts (JUN)

200.0K

211.4K

USD

14:00

10:00

IBD/TIPP Economic Optimism (JUL)

46.7

GBP

14:00

10:00

NIESR Gross Domestic Product Estimate (JUN)

0.1%

Currency

GMT

Release

Expected

Actual

Comments

JPY

23:50

Japan Money Stock M2+CD (YoY) (JUN)

2.1%

2.2%

Holds steady for second month.

JPY

23:50

Japan Money Stock M3 (YoY) (JUN)

1.9%

2.0%

NZD

0:00

QV House Prices (YoY) (JUN)

--

4.2%

Largest rise since June 2010.

AUD

1:30

NAB Business Conditions (JUN)

--

-1

Lowest reading since August 2011.

AUD

1:30

NAB Business Confidence (JUN)

--

-3

CNY

2:00

Trade Balance (USD) (JUN)

$24.00B

$31.73B

Largest surplus since January 2009.

CNY

2:00

Exports (YoY) (JUN)

10.6%

11.3%

CNY

2:00

Imports (YoY) (JUN)

11.0%

6.3%

JPY

5:00

Consumer Confidence (JUN)

40.7

40.4

Falls for the second time this year.

EUR

6:45

French Industrial Production (MoM) (MAY)

-1.0%

-1.9%

Largest decline since September 2011.

EUR

6:45

French Industrial Production (YoY) (MAY)

-1.6%

-3.5%

EUR

6:45

French Manufacturing Production (MoM) (MAY)

-0.3%

-1.0%

Contracts for the fourth time in 2012.

EUR

6:45

French Manufacturing Production (YoY) (MAY)

-2.1%

-4.3%

EUR

8:00

Italian Industrial Production s.a. (MoM) (MAY)

-0.6%

0.8%

Rises for the second time this year.

EUR

8:00

Italian Industrial Production w.d.a. (YoY) (MAY)

-8.6%

-6.9%

EUR

8:00

Italian Industrial Production n.s.a. (YoY) (MAY)

--

-6.8%

GBP

8:30

Industrial Production (MoM) (MAY)

-0.2%

1.0%

Biggest rise since March 2010.

GBP

8:30

Industrial Production (YoY) (MAY)

-2.1%

-1.6%

GBP

8:30

Manufacturing Production (MoM) (MAY)

-0.1%

1.2%

Largest advance since May 2011.

GBP

8:30

Manufacturing Production (YoY) (MAY)

-1.9%

-1.7%

GBP

8:30

Visible Trade Balance (Pounds) (MAY)

-9.100B

-8.363B

Smallest deficit since January.

GBP

8:30

Trade Balance Non EU (Pounds) (MAY)

-4.700B

-3.865B

GBP

8:30

Total Trade Balance (Pounds) (MAY)

-3.500B

-2.717B

USD

11:30

NFIB Small Business Optimism (JUN)

93.3

91.4

Lowest reading since October 2011.

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

DISCLOSURES

News & Analysis at your fingertips.