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
Bearish
Oil - US Crude
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
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
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
  • The $USD may return to the offensive as markets flee to cash amid fears of deep global recession thanks to the still-raging #coronavirus outbreak. Get your US Dollar update from @IlyaSpivak here: https://t.co/g1us4ZbYR5 https://t.co/detT6m6ZKo
  • The #Dow Jones, S&P 500 and #DAX 30 have bounced after aggressive declines. Can this momentum last? Trader positioning seems to be offering mixed signals as technicals point bearish. Get your market update from @ddubrovskyFX here:https://t.co/DdCUyoGSmL https://t.co/NQtbwy5Brg
  • Reports that London-based fund managers have discussed long market closures with the Bank of England are unlikely to bear fruit, but that they happened at all may boost already-crowded haven trades. Get your EUR/CHF market update from @DavidCottleFX here:https://t.co/mernf5MDH3 https://t.co/1rzQT6ClCY
  • $AUD chart positioning suggests prices have set a swing top near the 0.62 figure. Re-engaging the long-term downtrend against $USD may follow. Get your AUD/USD market update from @IlyaSpivak here:https://t.co/OIEDlId6HZ https://t.co/CzqJf3wsgh
  • The $USD could be on the verge of regaining upside momentum against ASEAN FX such as the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit. Will the Philippine Peso follow? Find out from @ddubrovskyFX here:https://t.co/cBzPejcNHu https://t.co/4fcImOiSzD
  • $NZD chart positioning suggests the downtrend against its US namesake may be resuming but trader sentiment studies flash warning sign for sellers.Get your NZD/USD market update from @IlyaSpivak here:https://t.co/NUHD43A8C9 https://t.co/K7l3Ju0GP0
  • The Federal Reserve has made a powerful statement about its commitment to shoring up offshore $USD funding markets through the #coronavirus spread. Get your market update from @DavidCottleFX here:https://t.co/fLZjxjr4L9 https://t.co/UdRor0d92U
  • The #Euro has dropped through support guiding it higher from late-March lows, suggesting that the end of a corrective rebound has given way to downtrend resumption. Get your $EURUSD market update from @IlyaSpivak here: https://t.co/gpKowYNmGi https://t.co/CY7RuZf91s
  • What are a few of the common trading mistakes made by traders? Find out from @WVenketas here: https://t.co/Q3sPmP2rya #tradingstyle https://t.co/ayjehPGEeT
  • $USDCAD came close to taking out the 17-year-high just a few weeks ago, but this was followed by an aggressive pullback down below the 1.4000 handle.Get your USD/CAD technical analysis from @JStanleyFX here: https://t.co/aWmL2rlWzG https://t.co/cauVFdBxsd
Euro at Risk as Traders Look to ECB With Hopes for Growth Support

Euro at Risk as Traders Look to ECB With Hopes for Growth Support

2012-09-28 23:53:00
Ilya Spivak, Head Strategist, APAC
Share:
Euro_at_Risk_as_Traders_Look_to_ECB_With_Hopes_for_Growth_Support_body_Picture_5.png, Euro at Risk as Traders Look to ECB With Hopes for Growth Support

Fundamental Forecast for the Euro: Bearish

The monetary policy announcement from the European Central Bank headlines the economic calendar in the coming week, with traders hoping policymakers will supplement debt crisis containment efforts with measures to bolster economic growth. The final set of September’s PMI figures will set the stage: the reports are expected to show manufacturing- and service-sector activity contracted at the fastest pace since June 2009; this in the wake of aggressive deficit-slashing budgets announced in Spain and France last week amplifies the urgency of ECB action.

A Deutsche Bank index tracking the Euro’s average value against its top counterparts shows a significant correlation with benchmark German Bund yields. This suggests that additional ECB easing is likely to broadly weigh on the Euro against the majors as interest rates are driven lower. Alternatively, the single currency may find support if September’s pickup in region-wide inflation keeps the ECB on the sidelines this time around.

The centrality of the Eurozone recession as the most significant headwind facing global economic growth adds a layer of complexity to the equation as risk appetite considerations enter the mix. Indeed, an expected contraction of 0.5 percent this year carries market-wide implications not only because the currency bloc supplies close to a quarter of worldwide output but also through its knock-on effects on counties dependent on EU demand (like China, for example).

That may mean that an ECB decision to withhold stimulus will carry negative implications for risk appetite at large. In such a scenario, the Euro appears likely to come under pressure against go-to safe havens like the US Dollar and Japanese Yen, though strength can be expected against more overtly risky counterparts like the Australian and New Zealand units. By the same token, the introduction of growth-supporting measures may produce the opposite effect.

On balance, this makes for a conflicted outlook as yield- and sentiment-based considerations appear to stand in direct opposition to one another. Data from Credit Suisse suggests the markets’ priced-in expectations are heavily skewed toward an “on-hold” ECB outcome however. This suggests the path of least resistance favors protracted, sentiment-driven Euro weakness that is perhaps temporarily tempered by a near-term advance in the immediate aftermath of the policy announcement.

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

DISCLOSURES

News & Analysis at your fingertips.