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
Mixed
Oil - US Crude
Mixed
Wall Street
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
Gold
Mixed
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
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
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
  • Gilead Sciences Phase 3 trial - Remdesivr generally well-tolerated in both 5-10 day working treatment groups - Odds of improvement in clinical status with 10day course were trending toward by not reaching statistical significance
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.59%, while traders in US 500 are at opposite extremes with 75.72%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ebB7GRBgFs
  • LIVE NOW: Join Technical Strategist @MBForex for his Weekly Strategy Webinar to review the setups we're tracking into the open of the month! https://t.co/chKtG7waxH
  • Forex Update: As of 12:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.09% 🇨🇦CAD: 0.50% 🇳🇿NZD: 0.48% 🇪🇺EUR: 0.10% 🇯🇵JPY: 0.07% 🇨🇭CHF: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/bVCqFfLZYU
  • Weekly Strategy Webinar starting in 15min! https://t.co/lxd5fZ5LG7
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-06-01
  • 🇲🇽 Business Confidence Actual: 35.2 Previous: 37 https://www.dailyfx.com/economic-calendar#2020-06-01
  • $AUDUSD: por encima de los niveles previos al #COVID19 #aud #usd #trading https://t.co/6PqkeurnQE
  • Hopes are high for deeper European economic integration as the continent battles back from the coronavirus slowdowns – but will it hold? What impact can this have on #Euro? Find out from @JStanleyFX here: https://t.co/b9ZWRd4cTr https://t.co/4ippNiIhEU
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.69%, while traders in US 500 are at opposite extremes with 75.91%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/5zdOjLokqv
Euro Hopes to Fizzle- Sterling Hit by Moodys Downgrade

Euro Hopes to Fizzle- Sterling Hit by Moodys Downgrade

2013-02-25 13:55:00
David Song, Strategist
Share:

Talking Points

  • Euro: CESifo Warns of Deepening Recession on Record-High Unemployment
  • British Pound: Moody’s Cuts U.K. Credit Rating, Gap Needs To Be Covered
  • U.S. Dollar: Fed’s Fisher, Lockhart on Tap- Humphrey-Hawkins in Focus

Euro: CESifo Warns of Deepening Recession on Record-High Unemployment

The Euro rallied to an overnight high of 1.3303 as European policy makers struck an improved outlook for the region, but the fundamental developments on tap for later this week may continue dampen the appeal of the single currency as the euro-area faces a deepening recession.

Indeed, European Union Economic and Monetary Affairs Commissioner Olli Rehn talked down the risks surrounding the region and said the ‘reforms are starting to pay off, the deficits are declining and Europe will gradually return to growth,’ while Bank of Greece Governor George Provopoulos talked down the risk of a euro-area breakup as the periphery country gradually emerges from the debt crisis.

In contrast, the CESifo, an economic research group in Europe, warned that the push for greater austerity ‘will dampen economic activity in almost all memberStates,’ and went onto say that ‘domestic demand looks set to shrink further in 2013,’ as the region faces record-high unemployment.

As the economic docket is expected to show easing price pressures in Europe along with another uptick in the jobless rate, a slew of dismal developments may encourage the European Central Bank (ECB) to push the benchmark interest rate to a fresh record-low, and the Governing Council may have little choice but to carry out its easing cycle throughout 2013 as the economic downturn threatens price stability.

As the EURUSD manages to hold above the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3120, we may see the euro-dollar consolidate ahead of the ECB interest rate decision on tap for the following week, but the pair may struggle to hold its ground should we see a slew of dismal developments coming out of the euro-area.

British Pound: Moody’s Cuts U.K. Credit Rating, Gap Needs To Be Covered

The British Pound gapped lower and tagged a fresh yearly low of 1.5067 as Moody’s Investor Services cut the U.K’s AAA credit rating to AA1.

In response, former Bank of England (BoE) board member Andrew Sentence warned of ‘downward pressures on sterling’ as the rating agency holds a negative outlook for the region, and went onto say that the government ‘needs to pay more attention to supply-side policies’ as the region struggles to emerge from the recession.

As the relative strength index on the GBPUSD continues to trade in oversold territory, we may see the pair further retrace the rebound from back in 2010, but the gap from the Sunday open may get filled before we see another sharp move to the downside should the fundamental developments coming out of the U.K. reflect a stronger recovery for 2013.

U.S. Dollar: Fed’s Fisher, Lockhart on Tap- Humphrey-Hawkins in Focus

The greenback pared the advance from the previous week, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) slipping to a low of 10,395, and the reserve currency may continue to consolidate ahead of the Humphrey-Hawkins Testimony on tap for later this week as market participants weigh the outlook for monetary policy.

Nevertheless, as a growing number of Fed officials adopt a more hawkish tone for monetary policy, the fresh batch of comments from Dallas Fed President Richard Fisher and Atlanta Fed President Dennis Lockhart may prop up the dollar over the next 24-hours of trading, and we may see the bullish sentiment surrounding the greenback gather pace over the near to medium-term as the world’s largest economy gets on a more sustainable path.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

15:30

10:30

Dallas Fed Manufacturing Activity (FEB)

5.5

USD

15:30

10:30

ECB's Jens Weidmann Speaks on Fiscal, Monetary Policy

USD

16:55

11:55

BoC Governor Mark Carney Speaks on Global Banking

EUR

18:00

13:00

ECB's Joerg Asmussen Speaks on Euro Economy

CAD

22:00

17:00

Acting US Treasury Secretary Wolin Speaks

EUR

0:00

19:00

Fed's Dennis Lockhart Speaks on U.S. Economy

--- 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

RelatedArticles: 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.