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
  • Make smart trading decisions with your free guide to trade the news. Download your free guide here.https://t.co/pb5E2KgRzW #DailyFXGuides https://t.co/ZhOghytxzz
  • 🇬🇧 Core Inflation Rate YoY (DEC) Actual: 1.4% Expected: 1.3% Previous: 1.1% https://www.dailyfx.com/economic-calendar#2021-01-20
  • 🇬🇧 Inflation Rate MoM (DEC) Actual: 0.3% Expected: 0.2% Previous: -0.1% https://www.dailyfx.com/economic-calendar#2021-01-20
  • 🇬🇧 Inflation Rate YoY (DEC) Actual: 0.6% Expected: 0.5% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2021-01-20
  • RT @FxWestwater: #NaturalGas Outlook: US Prices Sink Despite Global Supply Disruptions Link: https://www.dailyfx.com/forex/market_alert/2021/01/20/Natural-Gas-Outlook-US-Prices-Sink-Despite-Global-Supply-Disruptions.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/t95eI6fu…
  • Heads Up:🇬🇧 Inflation Rate MoM (DEC) due at 07:00 GMT (15min) Expected: 0.2% Previous: -0.1% https://www.dailyfx.com/economic-calendar#2021-01-20
  • Heads Up:🇬🇧 Inflation Rate YoY (DEC) due at 07:00 GMT (15min) Expected: 0.5% Previous: 0.3% https://www.dailyfx.com/economic-calendar#2021-01-20
  • Heads Up:🇬🇧 Core Inflation Rate YoY (DEC) due at 07:00 GMT (15min) Expected: 1.3% Previous: 1.1% https://www.dailyfx.com/economic-calendar#2021-01-20
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/LqAfNPnzSN
  • Alibaba's share price surged 8.8% after its founder Jack Ma reappeared after months out of public view. - BABA (+8.8%) - Tencent (+3.36%) - Meituan (+8.04%) - Xiaomi (+1.75%)
Euro Shrugs Off Report That Tapering Could Be Slowed Or Delayed

Euro Shrugs Off Report That Tapering Could Be Slowed Or Delayed

Martin Essex, MSTA, Analyst

Talking Points

- In a potentially important development, the Reuters newsagency quoted ‘sources’ as saying the ECB could delay or slow its tightening of Euro-Zone monetary policy due to worries about Euro strength.

- If true, that could weaken the currency by more than the limited reaction seen Thursday.

Check out our Trading Guides: they’re free and have been updated, with several new ones now available including Forex for Beginners, Building Confidence and Traits of Successful Traders

Rapid gains by the Euro against the US Dollar are worrying a growing number of policymakers at the European Central Bank, raising the chance its €60 billion per month asset-purchase program will be phased out only slowly, the Reuters newsagency reported Thursday, quoting “three sources familiar with discussions”.

Given the ECB is currently expected to discuss so-called “tapering” of its monetary-stimulus policy at either next Thursday’s meeting of its Governing Council and/or the following meeting on October 26, prior to action early in the new year, the report is highly significant.

However, EUR/USD responded only modestly, easing from 1.1876 just before the report was published to 1.1868 late in the European session.

Chart: EUR/USD Five-Minute Timeframe (August 31 Intraday)

Euro Shrugs Off Report That Tapering Could Be Slowed Or Delayed

Chart by IG

A strengthening currency tightens monetary policy indirectly so it would be no surprise if the climb in EUR/USD to above 1.20 earlier this week from below 1.05 at the start of the year was concerning ECB policymakers. So why such a limited reaction?

One possibility is that the report was not believed. Another is that traders in EUR/USD are now focusing on the Dollar side of the equation ahead of Friday’s US payrolls report. A third is that the markets were already aware of the impact the pair’s strength was likely to have on ECB decision-making.

However, it is also possible that the report was simply missed, suggesting there could yet be a reaction in due course. Or traders were focusing instead on earlier higher-than-expected Euro-Zone inflation data that will have boosted the case of the ECB hawks calling for a withdrawal of stimulus.

Either way, EUR/USD traders would be well advised now to watch for any comments backing, or denying, the Reuters report.

--- 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

Like to know about the Traits of Successful Traders? Just click here

Or New to Forex? That guide is here

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

DISCLOSURES