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
Mixed
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
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
GBP/USD
Mixed
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
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
  • The @ecb will likely boost its Pandemic Emergency Purchase Program at Thursday’s meeting of its Governing Council; a move that could give the #Euro a lift. Get your currencies market update from @MartinSEssex here: https://t.co/I4PbmJNG1z https://t.co/hu6Ld1KdDB
  • $GBPUSD doesn’t have the cleanest set of technical indications, but #USD may give indications if it can break its trading range via the $DXY. Get your currencies market update from @PaulRobinsonFX here: https://t.co/PrC9wAaXvU https://t.co/vHYHflwqR3
  • The ongoing contraction in US production may keep #oilprices afloat in June as crude output falls to its lowest level since October 2018. Get your crude #oil market update from @DavidJSong https://t.co/jj1bMLX0DF https://t.co/O9NOqbfHkb
  • watching the #SpaceX launch🍿
  • Major investment bank models have touted USD selling, given the outperformance in US equities relative to its counterparts over the past month. How is this likely to impact the month-end rebalancing? Find out from @JMcQueenFX here:https://t.co/MtNrHmXZpD https://t.co/d00z4019XE
  • The medium-term #gold outlook still seems favorable as the #Fed, #ECB and more keep rates around 0. Immediate event risk ahead includes the #RBA and #BoC interest rate decisions, US jobs data and Brexit. Get your gold market update from @ddubrovskyFX here: https://t.co/ABXy78LmUn https://t.co/rCALcGaKOL
Euro Hit by Heightening Uncertainties, Pound Tumbles on BoE

Euro Hit by Heightening Uncertainties, Pound Tumbles on BoE

2013-02-20 13:50:00
David Song, Strategist
Share:

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

News & Analysis at your fingertips.