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
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Australian Dollar to Rise as Easing Border Restrictions Buoy Sentiment - https://www.dailyfx.com/forex/market_alert/2020/11/26/Australian-Dollar-to-Rise-as-Easing-Border-Restrictions-Buoy-Sentiment.html $AUD $AUDJPY $AUDUSD https://t.co/izMcqggHOC
  • 🇰🇷 Interest Rate Decision Actual: 0.5% Expected: 0.5% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2020-11-26
  • Bank of Korea: 2020 GDP growth seen at -1.1% versus -1.3% projected in August, 2021 GDP growth seen at 3.0% versus 2.8% anticipated prior -BBG
  • Heads Up:🇰🇷 Interest Rate Decision due at 01:00 GMT (15min) Actual: 0.5% Expected: 0.5% Previous: 0.5% https://www.dailyfx.com/economic-calendar#2020-11-26
  • 7 out of 11 Dow Jones sectors ended lower, with about 63.3% of the index’s constituents closing in the red. Energy (-3.64%) , materials (-2.25%) and communication services (-1.24%) were among the worst performers on Wednesday. https://t.co/5MfrUSOYw4
  • Australian Private Capital Expenditure -3.0% in Q3 vs -1.5% expected and from -6.4% in Q2 (revised worse from -5.9%), $AUDUSD little changed so far -BBG
  • RT @FxWestwater: New Zealand Dollar Forecast: $NZDUSD May Rise Over Thanksgiving Holiday Link: https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/asia_am_briefing/2020/11/26/New-Zealand-Dollar-Forecast-NZDUSD-May-Rise-Over-Thanksgiving-Holiday.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Westwater&utm_campaign=twr https://t.co/dJMDOV…
  • The S&P 500, Dow Jones and crude oil prices have recently made critical advances to the upside. Is retail positioning supporting the case for further upside momentum?https://t.co/rfA2TsBctB https://t.co/D6bYpLxrKk
  • Update on #Cryptocurrencies #BITCOIN -0.85% #BITCOINCASH -4.66% #ETHEREUM -2.27% #RIPPLE -1.24% #LITECOIN -2.87%
  • An improving economic backdrop is bolstering crude oil prices and in turn, the Canadian Dollar. Still, the risk-sensitive Australian Dollar continues to move higher. Get your market update from @FxWestwater here:https://t.co/NJ683bZKpe https://t.co/4XfW9FjwWk
In the ECB's Wake, Euro Looks Free of its Crisis-Mode Market Dynamic

In the ECB's Wake, Euro Looks Free of its Crisis-Mode Market Dynamic

2013-10-03 10:05:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- Italian PM Letta retains power, but support in the Senate weakens; governance issues not solved at all.

- ECB stance very hopeful for growth and cautious about excess easing – Bundesbank influence evident.

- US government enters day 3 of shutdown with no end in sight; debt ceiling hit in 14 days.

To receive this report in your inbox every morning, sign up for Christopher’s distribution list.

INTRADAY PERFORMANCE UPDATE: 09:30 GMT

MAJORS

AUD

CAD

CHF

EUR

GBP

JPY

NZD

(vs USD)

-0.01%

0.00%

+0.12%

+0.24%

+0.04%

-0.45%

-0.47%

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR): 0.00% (-0.80%prior 5-days)

ASIA/EUROPE FOREX NEWS WRAP

The Dow Jones FXCM Dollar Index continues to teeter around its September lows but no break has transpired with a Doji candle having thus far formed on the daily chart. The stabilization in the US Dollar comes as the Euro has retained its post-ECB gains, while the Japanese Yen has fallen back slightly amid a generally strong stream of data across Asia and Europe; strong growth data is a solid check against crisis fears.

The Euro now finds itself in the envious position of having a central bank that is cautiously confident in its region’s economic recovery – something the British Pound has enjoyed the past several months, allowing it to rally in absence of purported ultra-dovish Governor Mark Carney’s latest iteration of QE, and something the US Dollar has not enjoyed as evidenced by the Federal Reserve refusing to taper QE3 in September.

I had been looking for the European Central Bank to come out and make the case for another LTRO in the coming months – predicated around weak growth, soft inflation, and low excess reserve levels at banks. While all those may be true which ECB President Mario Draghi acknowledged, he outlined one stark difference between conditions now versus in late-2011 and early-2012: the Euro-Zone is no longer in a crisis.

With crisis conditions having abated, the dynamics of low excess reserve levels – essentially capital that banks have on hand – has changed and become a less critical concern. Accordingly, the ECB has pivoted to a stern “wait-and-see” mode, as it allows the region to work through the fits of weaker credit growth in the near-term as organic growth conditions continue to try and accumulate.

The caveat, of course: if another crisis arises, the ECB will act accordingly. If loan growth remains weak, but another crisis does not come into play, then the ECB might experiment with a BoE-style Funding for Lending scheme, targeted at small- and medium-sized enterprises. While the impact of the BoE’s FLS was limited in the immediate months following its installment in July 2012, it is clear that the UK business environment has improved dramatically, considering the UK service sector just had its best quarter in 16 years, and the BoE itself has officially stepped away from the QE throttle.

EURUSD 5-minute Chart: October 2 to 3, 2013 Intraday

In_the_ECBs_Wake_Euro_Looks_Free_of_its_Crisis-Mode_Market_Dynamic_body_Picture_1.png, In the ECB's Wake, Euro Looks Free of its Crisis-Mode Market Dynamic

Taking a look at European credit, the generally improved tone of the PMI reports has provoked higher yields and a stronger Euro – a rare occurrence over the past few years given the tendency for higher yields to equate to increased financial stress. But with the ECB in “wait-and-see” mode, and definitely not in a hurry to introduce another LTRO barring the uprising of another crisis, it is positive that yields have edged up in support in the Euro as it comes on improved data – something that would transpire in more ‘normal’ conditions.

The Italian 2-year note yield has increased to 1.691% (+1.3-bps) while the Spanish 2-year note yield has increased to 1.420% (+3.5-bps). Likewise, the Italian 10-year note yield has increased to 4.363% (+0.6-bps) while the Spanish 10-year note yield has increased to 4.258% (+2.0-bps); higher yields imply lower prices.

Read more: Dollar Down as Government Closes; Abe Tax Drops USD/JPY Under ¥98

ECONOMIC CALENDAR – UPCOMING NORTH AMERICAN SESSION

In_the_ECBs_Wake_Euro_Looks_Free_of_its_Crisis-Mode_Market_Dynamic_body_x0000_i1028.png, In the ECB's Wake, Euro Looks Free of its Crisis-Mode Market Dynamic

See the DailyFX Economic Calendar for a full list, timetable, and consensus forecasts for upcoming economic indicators. Want the forecasts to appear right on your charts? Download the DailyFX News App.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, please fill out this form

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

DISCLOSURES