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
EUR/USD
Bullish
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
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: 0.63% 🇪🇺EUR: 0.46% 🇨🇦CAD: 0.37% 🇳🇿NZD: 0.09% 🇬🇧GBP: -0.05% 🇯🇵JPY: -0.35% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Xdme1X3ZxK
  • The #Nasdaq may be in retreat mode from the recent high, but as long as it stays tucked within the confines of a neat upward channel in place since April the outlook remains generally bullish. Get your Nasdaq market update from @PaulRobinsonFX here:https://t.co/wJ84HIKMbz https://t.co/SMPbAPO7eU
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: US 500: 1.33% Wall Street: 0.82% France 40: -0.07% Germany 30: -0.10% FTSE 100: -0.30% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/aeuc1S326s
  • Hey traders! What is driving the markets today? Find out from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/yC5XVJC5fY
  • Canadian #Dollar Outlook: $USDCAD Five Weeks Down, Five Month Low - https://t.co/O1op1wYcdT https://t.co/GaYTjFmjtc
  • RT @C_Barraud: 🇺🇸 *PELOSI SAYS `MILES APART' ON SOME ISSUES IN #STIMULUS TALKS - BBG *PELOSI: `VERY FAR APART' ON MONEY FOR GETTING KIDS TO…
  • White House Economic Advisor Larry Kudlow: -Data suggests economy only needs 'targeted money' -Thinks economy is entering a 'self-sustaining recovery' -Trump 'completely opposes' bailing out states $USD $TNX $SPX
  • FTSE 100 IG Client Sentiment: Our data shows traders are now net-short FTSE 100 for the first time since Jul 20, 2020 when FTSE 100 traded near 6,264.90. A contrarian view of crowd sentiment points to FTSE 100 strength. https://www.dailyfx.com/sentiment https://t.co/iX4wB4HOah
  • Fed's Rosengren says the #Fed has been clear that negative interest rates are unlikely to be used
  • Back from vacation and back on schedule Going live for today's stock market webinar in 10 minutes - https://t.co/rmwDABTiN2 https://t.co/oC3Igu2muT
Forex: Euro Rebound Weighed By Growth Concerns- Pound at Key Juncture

Forex: Euro Rebound Weighed By Growth Concerns- Pound at Key Juncture

2013-01-16 13:50:00
David Song, Strategist
Share:

Talking Points

  • Euro: Germany Cuts Growth Forecast, ECB Talks Down Exchange Rate Risk
  • British Pound: BoE Warns of Additional Support For U.K. Banks
  • U.S. Dollar: Rebounds Ahead of Fed’s Beige Book

Euro: Germany Cuts Growth Forecast, ECB Talks Down Exchange Rate Risk

The EURUSD tagged an overnight high of 1.3323 as European Central Bank (ECB) board member Ewald Nowotny struck a neutral tone for monetary policy and argued that the euro exchange rate is ‘not a major concern,’ but we’re seeing the single currency struggle to hold its ground as the fundamental outlook for Europe’s largest economy deteriorates.

At the same time, Governing Council member Peter Praet said ‘maintaining price stability is the main task of the ECB’ as the governments operating under the fixed-exchange rate system become increasingly reliant on monetary support, and went onto say that the unprecedented efforts taking by the central bank ‘must be complemented by measures and reforms at the national level and of European governance’ as the debt crisis continues to drag on the real economy.

Indeed, Germany’s Economy Ministry now expects the economy to expand 0.4% in 2013 versus an initial projection for a 1.0% rise, and the ECB may continue to push back its forecast of seeing the euro-area return to growth amid record-high unemployment along with the ongoing slack in private sector activity.

Although we’re seeing the EURUSD maintain the upward trend from back in July, the bearish divergence in the relative strength index continues to dampen the prospects of seeing a further advance in the exchange rate, and the pullback from 1.3403 may expose the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3120 as the weakening outlook for growth and inflation raises the scope for an ECB rate cut.

British Pound: BoE Warns of Additional Support For U.K. Banks

The British Pound slipped to a fresh monthly low of 1.5975 as the Bank of England (BoE) warned two major banks in the U.K. may require billions in fresh capital, and we may see the sterling struggle to maintain the bullish trend carried over from the previous year should the GBPUSD close below the 1.6000 figure.

As the fundamental outlook remains clouded with high uncertainty, market participants continue to see scope for more quantitative easing in the U.K., but the central bank appears to be slowly moving away from its easing cycle as inflation is expected to hold above the 2% target over the policy horizon.

Beyond the vote count, the BoE Minutes due out on January 23 may show a more hawkish central bank amid the stickiness in price growth, and we may see the Monetary Policy Committee talk down speculation for more easing as the Funding for Lending Scheme continues to work its way through the real economy.

Indeed, we will scale back our bullish bias for the GBPUSD if the pair fails to put in a close above 1.6000, but the pound-dollar could still be carving out a higher low ahead of the policy statement should we see the pair trade back within the upward trending channel dating back to June.

U.S. Dollar: Rebounds Ahead of Fed’s Beige Book

The greenback is regaining its footing going into the North American trade, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) bouncing back from a low of 10,046, and the reserve currency may track higher over the next 24-hours of trading should the Federal Reserve strike an improved outlook for the world’s largest economy.

The Beige Book may prop up the dollar as the central bank continues to highlight the resilience in private consumption along with the budding recovery in the housing market, and the fresh batch of central bank rhetoric may heighten the bullish sentiment surrounding the reserve currency as a growing number of Fed officials drop their dovish tone for monetary policy.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

14:00

9:00

Total Net TIC Flows (NOV)

-$56.7B

USD

14:00

9:00

Net Long-term TIC Flows (NOV)

$1.3B

USD

14:15

9:15

Industrial Production (DEC)

0.3%

1.1%

USD

14:15

9:15

Capacity Utilization (DEC)

78.5%

78.4%

USD

14:15

9:15

Manufacturing Production (SIC) (DEC)

0.6%

1.1%

USD

15:00

10:00

NAHB Housing Market Index (JAN)

48

47

USD

15:00

10:00

Fed's Narayana Kocherlakota Speaks on Monetary Policy

USD

15:30

10:30

DOE U.S. Crude Oil Inventories (JAN 11)

1314K

USD

15:30

10:30

DOE U.S. Distillate Inventory (JAN 11)

6777K

USD

15:30

10:30

DOE U.S. Gasoline Inventories (JAN 11)

7412K

EUR

17:00

12:00

ECB's Jorg Asmussen Speaks on Euro Economy

USD

19:00

14:00

Fed's Beige Book Economic Report

--- 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

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

DISCLOSURES

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.