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
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • German Covid deaths increase by 1,734 - BBG
  • Trump grants full pardon to Stephen Bannon, Elliott Broidy - BBG
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in EUR/JPY are at opposite extremes with 64.67%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/dKgoDeibwS
  • China's wealthiest person, Jack Ma reportedly released a video supporting a program for rural teachers. He hasn't been seen since the Chinese gov't rejected his company's, Alibaba, IPO. Notably, $BABA was up 3.4% this past session
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.39% 🇨🇦CAD: 0.20% 🇳🇿NZD: 0.19% 🇯🇵JPY: 0.15% 🇪🇺EUR: 0.12% 🇨🇭CHF: 0.10% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/kYm9OmSCbN
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.22% US 500: 0.09% Wall Street: -0.06% Germany 30: -0.08% France 40: -0.21% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/vv3latjbho
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM73cHA https://t.co/Jeiti9RSA5
  • WTI breached above a key chart resistance of US$ 52.03 (127.2% Fibonacci extension) and has since opened the door for further upside potential with an eye on US$ 55.23 (161.8% extension). Prices are trending higher within an “Ascending Channel” as highlighted on the chart below. https://t.co/EF2YQGZEz3
  • The Australian Dollar looks poised to outperform its haven-associated counterparts, as bullish technical setups take shape on multiple timeframes. Key levels for AUD/USD, AUD/JPY and AUD/CHF. Get your market update from @DanielGMoss here:https://t.co/Q5MS57yG8W https://t.co/NaUPI5qTKS
  • RT @FxWestwater: Australian Dollar Outlook: $AUDUSD Unfazed by Falling Westpac Confidence Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2021/01/20/Australian-Dollar-Outlook-AUDUSD-Unfazed-by-Falling-Westpac-Confidence.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/uSsC…
ECB Worries About Strength of Euro, EUR/USD Drops to Three-Week Low

ECB Worries About Strength of Euro, EUR/USD Drops to Three-Week Low

Martin Essex, MSTA, Analyst

Talking Points

- The account of the July 20 monetary policy meeting of the European Central Bank’s Governing Council show that the ECB is worried about the Euro overshooting

- In response, EUR/USD fell back to its lowest level for three weeks.

Check out our Trading Guide for the Euro: it’s free and has been updated for the third quarter of 2017

The minutes of the July 20 monetary policy meeting of the European Central Bank’s Governing Council show that the ECB is concerned about the currency overshooting after this year’s climb that has taken EUR/USD from a 1.0342 low on January 3 to a high of 1.1918 at the start of this month.

In response, the pair dropped to its lowest level for three weeks before quickly rallying, European stock prices jumped and core Euro-Zone government bond yields edged lower.

Chart: EUR/USD Five-Minute Timeframe (August 17, 2017)

ECB Worries About Strength of Euro, EUR/USD Drops to Three-Week Low

Chart by IG

Concerns were expressed about a possible overshooting in the repricing by financial markets, notably the foreign exchange markets, in the future, the ECB said in the accounts.It was underlined that the still favorable financing conditions could not be taken for granted.”

The ECB has said already that talks on cutting back, or ‘tapering’, its €60 billion per month asset-purchase program won’t take place until the council’s next meetings on September 7 and/or October 26. This was the message given by ECB President Mario Draghi after the July meeting, although some analysts continue to expect the ECB’s monetary stimulus measures to be reduced relatively soon.

The problem for the ECB is that inflation, confirmed today at 1.3% year/year in July, remains well below the central bank’s target of below but close to 2% over the medium term and a tapering of monetary stimulus might be expected to keep it below target. Moreover, the recent strength of the Euro has already tightened policy, suggesting that interest rates could remain lower for longer than market pricing currently suggests.

Draghi, who has blamed the inflation undershoot on external factors, had been expected to give his thoughts on policy at the Kansas City Fed’s three-day economic policy symposium at Jackson Hole, Wyoming, that begins next Thursday but reports yesterday said he would not in fact give any steers on policy there.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up

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

DISCLOSURES