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.

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
EUR/USD
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇨🇭CHF: -0.15% 🇳🇿NZD: -0.15% 🇯🇵JPY: -0.24% 🇬🇧GBP: -0.33% 🇨🇦CAD: -0.35% 🇦🇺AUD: -0.42% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/x0PR3hSLqt
  • #CrudeOil plunging over 2.3% as Libya lifts force majeure on oil exports from El Feel oilfield A push back to support at the September low (36.15) looks likely if price can overcome the psychologically imposing $38 mark #OOTT https://t.co/gMxgs2qPTR
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.57% Wall Street: -0.90% US 500: -0.91% France 40: -0.98% Germany 30: -1.49% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/MtIrqoITpz
  • #Euro Outlook: Covid-19 Second Wave to Weigh on $EURJPY, $EURUSD - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2020/10/26/Euro-Outlook-Covid-19-Second-Wave-to-Weigh-on-EURJPY-EURUSD-.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr https://t.co/zLU4HOLcHE
  • Commodity currencies underperformed after House Speaker Nancy Pelosi and White House Chief of Staff Mark Meadows accused each other of "moving the goalposts" on stimulus legislation on Sunday - Bloomberg AUD/USD -0.35% CAD/USD - 0.29% NOK/USD - 0.45%
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here: https://t.co/NpC1D8y4Aa https://t.co/PkokcJCGxp
  • Some massive surges in Covid-19 cases worldwide: The US (+78,702 on Oct 24) France (+ 52,013 on Oct 25) Spain (+ 19,851 on Oct 23) UK (+ 19,790 on Oct 25) Germany (+ 11,176 on Oct 24) A virus resurgence dampened sentiment, weighing on equities, oil and growth-linked currencies.
  • Market Update Risk-off tilt persisting throughout APAC trade $USD gaining against all its major counterparts, with the cyclically-sensitive $AUD and $CAD the biggest underperformers #SP500 continuing to grind lower alongside #crudeoil, #gold and Australia's #ASX200
  • 🇯🇵 Leading Economic Index Final (AUG) Actual: 88.4 Expected: 88.8 Previous: 86.7 https://www.dailyfx.com/economic-calendar#2020-10-26
  • - British Pound braces for #Brexit as political volatility rattles GBP crosses - Australian Dollar traders closely eyeing Chinese Plenum and 5-year plan - #Euro, US Dollar price action may pick up on upcoming WTO tariff ruling https://www.dailyfx.com/forex/fundamental/article/special_report/2020/10/26/GBP-AUD-USD-Volatility-to-Swell-on-Cross-Continental-Geopolitical-Risks.html
Euro Finds a Sorely Needed Bullish Driver in Recent ECB Commentary

Euro Finds a Sorely Needed Bullish Driver in Recent ECB Commentary

2017-07-03 02:11:00
Christopher Vecchio, CFA, Senior Strategist
Share:
Euro Finds a Sorely Needed Bullish Driver in Recent ECB Commentary

Fundamental Forecast for EUR/USD: Neutral

- EUR/USD sailed into fresh yearly highs last week, and may have a new bullish catalyst to work through the summer months.

- The only EUR-cross that was negative last week was EUR/GBP, which was diverted thanks to surprising central bank commentary (but not from the ECB).

- See our Q3’17 EUR/USD forecast at the start of the new quarter.

After several weeks of sideways trading, the Euro finally picked a direction. The Euro gained versus every major currency last week save for the British Pound, as European Central Bank President Mario Draghi’s commentary on Tuesday sent the single currency higher across the board through the end of the week. The sudden shift in tone by the head of the ECB at the end of the month and the quarter has now given the Euro the bullish catalyst it has been sorely lacking in previous weeks.

As we turn the calendar to July and Q3’17, the Euro now finds itself in the enviable position of having a central bank seemingly set on the normalization path, which should underpin a bullish tone through at least the September policy meeting, when the ECB will unveil new staff economic projections (SEPs). While academic in some aspects, ECB President Draghi’s speech this past week yielded important insight into the ECB’s thought-making processes that should hold sway over FX markets for the foreseeable future.

Perhaps the most interesting and important set of commentary from ECB President Draghi came regarding the relationship between inflation and the unemployment rate, which is plotted along what is known as the Phillip’s Curve. Historically in developed economics, it has been observed that lower unemployment rates (tighter labor markets) tend to bring about higher inflation pressures (via wage growth).

Thus, even as inflation rates remain uneven across the Euro-Zone and still below the ECB’s +2% target, and even as energy prices have fallen back and are now negative year-over-year, ECB President Draghi feels that a rebound in inflation pressures is possible after the mid-year slump, thanks in part to the overall improved growth and labor outlooks for the region. Further drops in the unemployment rate should translate into higher inflation, which will be reason enough for the ECB to further scale back its QE program sometime in the coming months.

For the Euro, this now means there is a tangible reason to trade around for the summer months, when previously the Euro was desperately searching for a catalyst. Looking ahead into the immediate future, with a rather quiet ECB calendar in the days ahead and an equally light economic docket, the Euro will keep this new development in the background and likely cede the spotlight to its counterpart across the pairs – be it the British Pound, Japanese Yen, or US Dollar.

See our Q3’17 Euro forecast - check out the DailyFX Trading Guides.

--- Written by Christopher Vecchio, Senior Currency Strategist

To contact Christopher, email him at cvecchio@dailyfx.com

Follow him in the DailyFX Real Time News feed and Twitter at @CVecchioFX.

To receive this analyst’s reports, sign up for his distribution list.

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

DISCLOSURES