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. See our updated Privacy Policy here.

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
More View more
Real Time News
  • Goldman Sachs sees the Turkish Central Bank cutting rates by 100bps over next three central bank meetings
  • Cable has undergone a nice rally as of late, with it having risen over four figures off the September low.Get your $GBPUSD market update from @PaulRobinsonFX here:https://t.co/jdNzvlgecz https://t.co/kF4pZgwiOz
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.35% 🇨🇭CHF: 0.10% 🇪🇺EUR: -0.04% 🇬🇧GBP: -0.04% 🇦🇺AUD: -0.18% 🇳🇿NZD: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/SSMahbp5s0
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.01% Germany 30: -0.19% Wall Street: -0.21% France 40: -0.23% FTSE 100: -0.32% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/8116UpQzpE
  • Yen Pullback Begins: EUR/JPY, GBP/JPY, AUD/JPY, CAD/JPY https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/10/21/Yen-pullback-begins-EUR-JPY-EURJPY-GBP-JPY-GBPJPY-AUD-JPY-AUDJPY-CAD-JPY-CADJPY.html https://t.co/iZpZvFopiF
  • The oil price breakout has extended into the first level of lateral resistance- risk for some ‘back and fill’ here but the outlook remains constructive. Get your market update from @MBForex here:https://t.co/jdNzvkYCNZ https://t.co/OlqgYQLcxK
  • Tesla opened lower as afterhours trade yesterday suggested we would, but after the gap down, we've had a strong rally this morning. I wonder if the Robinhood-type crowd trades before/after hours or if that is the traditional segment https://t.co/tFVllKbBKb
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Gold: -0.02% Silver: -0.40% Oil - US Crude: -1.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ek6GdiGhQ3
  • The Turkish Central Bank cut its weekly repo rate to 16%, marking a 200bps cut vs expectations for a 50-100bps reduction. Get your market update from @JMcQueenFX here: https://t.co/Gz3yZYqZdn https://t.co/C1PgJsCoGp
  • 🇺🇸 CB Leading Index MoM (SEP) Actual: 0.2% Expected: 0.4% Previous: 0.8% https://www.dailyfx.com/economic-calendar#2021-10-21
Euro Hit by Heightening Uncertainties, Pound Tumbles on BoE

Euro Hit by Heightening Uncertainties, Pound Tumbles on BoE

David Song, Strategist

Talking Points

  • Euro: Spain to Limit Public Borrowing, Portugal Lowers Growth Outlook
  • British Pound: BoE Votes 6-3 on QE, Sees Sustainable Recovery Ahead
  • U.S. Dollar: Housing Starts Disappoints- FOMC Minutes in Focus

Euro: Spain to Limit Public Borrowing, Portugal Lowers Growth Outlook

The Euro failed to maintain the overnight advance to 1.3432 amid reports that the Spanish government will cap the interest its 17 regions can pay to borrow, while Portuguese Finance Minister Vitor Gaspar warned that the 2013 growth forecast may be reduced by 1.0% as the region seeks a one-year extension to meet its budget target.

Despite the ongoing turmoil in the euro-area, European Central Bank (ECB) board member Joerg Asmussen said there’s reason to be ‘cautiously optimistic’ as he expects stronger growth in the first-quarter, and sees a ‘mild’ and ‘gradual’ recovery this year as monetary policy remains highly accommodative. At the same time, Governing Council member Christian Noyer said that ‘there is no particular interest in cutting rates by a few cents if it only impacts Germany or core countries,’ but the central bank may have little choice but to carry out its easing cycle throughout 2013 as the fundamental outlook for the periphery countries turn increasingly bleak.

As the governments operating under the single currency become increasingly reliant on monetary support, we should see ECB President Mario Draghi continue to strike a dovish tone for monetary policy, and we may see the EURUSD threaten the bullish trend carried over from the previous year as the economic downturn threatens price stability.

As the 50-Day SMA (1.3304) lines up with trendline support, we will be keeping a close eye on the key figure over the remainder of the week, but a break below the moving average would foreshadow a larger decline in the exchange rate as the EURUSD struggles to push back above the 50.0% Fibonacci retracement from the 2009 high to the 2010 low around 1.3500.

British Pound: BoE Votes 6-3 on QE, Sees Sustainable Recovery Ahead

The British Pound tumbled to a low of 1.5280 as the Bank of England (BoE) Minutes showed a 6-3 split with the Monetary Policy Committee, with Governor Mervyn King, Paul Fisher and David Miles pushing to expand its asset purchase target by another GBP 25B, and the central bank may stick to the sidelines throughout 2013 as inflation is expected to hold above the 2% target over the next two-years.

Although the BoE discussed further measures to boost private sector credit, the central bank anticipates a slow and sustainable recovery in the U.K., and we may see the MPC gradually move away from its easing cycle this year as the Funding for Lending Scheme continues to work its way through the real economy.

Despite the marked selloff in the GBPUSD, we may see the pair maintain the 2012 range as price action holds above the 50.0% Fib from the 2009 low to high around 1.5260, but we will keep a close eye on the RSI as it dips into oversold territory.

U.S. Dollar: Housing Starts Disappoints- FOMC Minutes in Focus

The greenback bounced back on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a fresh yearly high of 10,357, and the reserve currency may appreciate further during the North American trade should the FOMC Minutes highlight an improved outlook for the world’s largest economy.

Although U.S. Housing Starts declined 8.5% in January, Building Permits increased another 1.8% during the same period, but the policy statement due out later today should have a greater influence on the USD as market participants weigh the outlook for monetary policy.

As a growing number of Fed officials take note of a more broad-based recovery, the minutes may sound more hawkish this time around, and the statement may continue to talk down bets for more quantitative easing as the U.S. economy gets on a more sustainable path.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

EUR

15:00

10:00

Euro-Zone Consumer Confidence

-23.2

-23.9

USD

19:00

14:00

Fed Releases Minutes from Jan 29-30 FOMC Meeting

NZD

21:00

16:00

ANZ NZ Job Ads (MoM) (Jan)

0.4%

--- 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

New to FX? Watch this Video

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

DISCLOSURES