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
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
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.18% Silver: 0.00% Gold: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/lgnQTs4F8U
  • Forex Update: As of 10:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.18% 🇨🇦CAD: 0.17% 🇪🇺EUR: 0.15% 🇯🇵JPY: 0.06% 🇦🇺AUD: 0.06% 🇳🇿NZD: -0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Tu1NZZUBBo
  • The $USD suddenly seems scarce amid the #coronavirus outbreak. That threatens short-term financing underpinning global supply chains, despite the Fed’s epic efforts. Get your US Dollar market update from @DavidCottleFX here:https://t.co/D2p2Vl2ORK https://t.co/56Iq8CmJ7Z
  • Indices Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Germany 30: 1.33% France 40: 1.21% Wall Street: 0.29% US 500: 0.26% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/zusHPHZgFm
  • Ripple IG Client Sentiment: Our data shows traders are now at their least net-long Ripple since Mar 29 when Ripple traded near 0.16. A contrarian view of crowd sentiment points to Ripple strength. https://www.dailyfx.com/sentiment https://t.co/TnhXuofL8C
  • #Bitcoin prices may see a pickup in volatility ahead of the 2020 halving as the #coronavirus pandemic threatens to disrupt cross-continental $BTC mining operations. Get your market update from @ZabelinDimitri here: https://t.co/BoH24MVf4P https://t.co/c7YqD7VXqc
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.72%, while traders in Wall Street are at opposite extremes with 78.06%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/OukR4dIlJc
  • Commodities Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.18% Silver: 0.00% Gold: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/xivz7ptPMn
  • Hey, traders 👋 do you want live AMAS with our analysts, market updates and tools to improve your trading strategy? Join us now on Instagram! 👉 https://t.co/pHGzVMqsC4 https://t.co/EBCYaTLWGi
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.25% 🇳🇿NZD: 0.18% 🇪🇺EUR: 0.18% 🇨🇭CHF: 0.12% 🇯🇵JPY: 0.11% 🇬🇧GBP: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/aM45N7u2eL
Euro Surges Despite Existential Threats – Does it Survive Week Ahead?

Euro Surges Despite Existential Threats – Does it Survive Week Ahead?

2012-09-08 03:41:00
David Rodriguez, Head of Product
Share:
Euro_Surges_Despite_Existential_Threats_Does_it_Survive_Week_Ahead_body_Picture_1.png, Euro Surges Despite Existential Threats – Does it Survive Week Ahead?

Euro Surges Despite Existential Threats – Does it Survive Week Ahead?

Fundamental Forecast for the Euro: Bearish

The Euro posted its single-largest weekly advance against the US Dollar (ticker: USDOLLAR) since February as a new bond buying plan from the European Central Bank eased Euro Zone tensions and forced many speculators out of their short positions.

Yet the Euro isn’t out of the woods yet: a critical German court ruling on the legality of European bailouts could rule recent ECB efforts null, while a potentially pivotal US Federal Open Market Committee decision could force substantial FX volatility.

The ECB announced unlimited bond purchases for at-risk governments via the Outright Monetary Transactions (OMT) program, and yields on 10-year Spanish Government bonds fell by their most in at least 20 years on the news. Yet the ECB put a clear caveat on the “unlimited” support; any given country would need to submit to the terms of the European Financial Stability Facility (EFSF) or the European Stability Mechanism (ESM) to receive aid from the central bank. The critical provision may prove a tough pill to swallow for the country in clearest need of fiscal aid—Spain.

The Spanish government has instituted deeply unpopular fiscal austerity measures in a bid to stabilize Spain’s balance sheet, but they would almost certainly be forced by the EFSF/ESM to institute further belt tightening despite overseeing a domestic economy mired in recession. The material bounce in Spanish bond prices/drop in yields suggests that most view plans as favorable. It’s nonetheless obvious that Spain and the Euro Zone are not out of the woods just yet.

A highly-anticipated German Constitutional Court ruling due September 12 could ultimately render debates over the ECB’s bond buying irrelevant. European bailouts have always been deeply unpopular in Euro zone paymaster Germany, and legal challenges against the ESM will come to a head as its highest court rules on its legality.

FX Options markets show that traders are paying surprisingly little for Euro/US Dollar volatility, and that fact in itself suggests that most put low odds on an adverse German ruling. But the existential threat to the Euro as a currency remains real, and we can’t ignore the possibility that the court could effectively undo endless efforts to keep the European Monetary Union intact.

If the Euro survives the German ruling on the 12th, it will look to a highly-anticipated US Federal Open Market Committee (FOMC) policy decision to drive further volatility on the 13th. Sharply disappointing US Nonfarm Payrolls data for August increased odds that the FOMC would vote for further Quantitative Easing (QE3) measures and effectively print US Dollars to boost growth. Some claim that there is a 50% chance of QE3 on the Sept 13 announcement, and the Dollar’s reaction to disappointing NFPs data suggests it stands to fall further on such an announcement (sending EURUSD higher).

There’s a lot riding on the week ahead, and it will be critical to watch whether the recent wave of Euro/US Dollar short-covering continues on make-or-break event risk out of Europe and the US economy through the second week of post-summer trading. – DR

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

DISCLOSURES

News & Analysis at your fingertips.