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
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
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
Gold
Mixed
GBP/USD
Bullish
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
  • #Gold had some big moves last week, and while vol is expected to die down a bit, it will be important to see if gold can hold its ground in the coming days/weeks. Get your #metals update from @PaulRobinsonFX here: https://t.co/N8a84hRnHN https://t.co/3fjodPHTDm
  • The S&P 500's refusal to hit a record and Dollar's anchor to range this past week is sign of summer liquidity conditions, but the quiet is not insurmountable. 'S&P 500 Record and Dollar Break Look to Stimulus and Trade to Override Seasonality' https://www.dailyfx.com/forex/video/daily_news_report/2020/08/15/SP-500-Record-and-Dollar-Break-Look-to-Stimulus-and-Trade-to-Override-Seasonality-.html https://t.co/mbvPkdQfYl
  • Get your snapshot update of the of relative currency strength and exchange status from around the globe here: https://t.co/DmhBkcMZBK https://t.co/kFk6ccU3Sk
  • The Federal Reserve System (the Fed) was founded in 1913 by the United States Congress. The Fed’s actions and policies have a major impact on currency value, affecting many trades involving the US Dollar. Learn more about the Fed here: https://t.co/ADSC4sIHrP https://t.co/aXSB0bG3y0
  • Take a closer look visually at the most influential global importers and exporters here: https://t.co/1G7CRsegRX https://t.co/i342ipPuvW
  • Why financial market traders must monitor both monetary and fiscal policy? Find out from @MartinSEssex here:https://t.co/Fkzk88Y5gm https://t.co/tHp0Nb3Tr5
  • USD/JPY is bucking the trend in USD weakness, tentatively putting it on a path towards higher levels. Get your $USDJPY technical analysis from @PaulRobinsonFX here: https://t.co/RnrBCFE3gt https://t.co/hTSdTcIwZY
  • The Canadian Dollar gained with government bond yields. Might USD/CAD find its way to current 2020 lows? Canada’s benchmark stock index, the TSX Composite, faces the March high.Get your $USDCAD market update from @ddubrovskyFX here:https://t.co/0Ba8E2S7vC https://t.co/JLUTzF6xlY
  • IG Client Sentiment is warning that the S&P 500, gold prices and AUD/USD could fall ahead as upside exposure accumulates. What are key technical levels to watch for next? Find out from @ddubrovskyFX here: https://t.co/YsBypn73vy https://t.co/erPb9HMRVc
  • The US Dollar could be readying to rise against the Singapore Dollar and Indonesian Rupiah ahead. Will USD/PHP and USD/MYR also follow this outlook? Find out from @ddubrovskyFX here: https://t.co/xvMPZha5SB https://t.co/P9QLmnY1Fg
Euro Outlook May Darken on Slow Growth, Dovish ECB

Euro Outlook May Darken on Slow Growth, Dovish ECB

2019-12-15 02:00:00
Ilya Spivak, Head Strategist, APAC
Share:
Euro vs US Dollar price chart

EUR/USD chart created with TradingView

EURO FORECAST: BEARISH

  • Euro may refocus on yield shortfall vs. majors as Brexit risk fades
  • PMI, IFO survey data may help confirm dovish ECB policy outlook
  • EU-US trade tensions may deepen as China deal emboldens Trump
Starts in:
Live now:
Aug 17
( 02:08 GMT )
Recommended by Ilya Spivak
Cross-Market Weekly Outlook
Register for webinar
Join now
Webinar has ended

The Euro was treated to a substantial reprieve on the political risk front last week as the Conservative party stormed to a commanding win in the UK general election. That sets the stage for passing the Brexit withdrawal agreement reached between the EU and the government of Prime Minister Boris Johnson.

This seems to all but banish the risk of a disorderly EU/UK divorce in the near term, a positive development for the economic outlook on both sides of the English Channel. Trade deal negotiations are likely to consume traders’ attention from here, but this debate probably won’t get underway in earnest until 2020.

EURO YIELD SHORTFALL MAY RETURN TO THE SPOTLIGHT

Investors may now turn their gaze back to Eurozone economic fundamentals. That could bode ill for the single currency as trade tensions with the US threaten to hurt already sluggish economic growth, locking the ECB in an ultra-dovish policy stance and cementing the Euro’s yield disadvantage.

Looking at 2-year bond yields as a benchmark, the return on owning the single currency lags that of an average of its top counterparts – the US Dollar, Japanese Yen, British Pound and Australian Dollar – by about 133bps. The shortfall shrank from 200bps so far this year, mostly thanks to Fed interest rate cuts.

The US central bank has now signaled its intent to remain in wait-and-see mode for the foreseeable future, preferring to fade into the background through 2020. With unemployment and inflation mostly on-target and a hotly contested presidential election underway, that seems hardly surprising.

What this means for the Euro is that imported improvement in its relative yield position has probably run its course. Meanwhile, local growth is at near-standstill having steadily deteriorated since early 2018. ECB President made clear what this means, saying “an ample degree of stimulus is needed”.

PMI AND IFO DATA, EU-US TRADE JITTERS MAY DRIVE EURO LOWER

The markets may be reminded as much when December’s Eurozone PMI and German IFOsurveys hit the wires. They are expected to put regional manufacturing- and service-sector activity growth as well as business confidence in the bloc’s largest economy within a hair of two-year lows.

Heightened EU-US trade tensions may be another headwind. Emboldened by an almost-there trade deal with China, the Trump administration might now tighten the screws on its trans-Atlantic partners. Layered atop already sluggish conditions, this likely makes for a lasting yield shortfall. The Euro looks vulnerable.

--- Written by Ilya Spivak, Sr. Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

EURO TRADING RESOURCES

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

DISCLOSURES

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.