Eur/usd - page 86
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Ukraine Crisis Continue To Dampen German Investor Confidence
Investor sentiment in Germany weakened for a fourth straight month in April as the effect of the Ukraine crisis continued to weigh, results of a key survey showed Tuesday.
Meanwhile, a larger Eurozone trade surplus for February helped to slightly ease concerns regarding a strong euro.
The economic expectations index for Germany dropped to 43.2 from 46.6 in March, the Mannheim-based Centre for European Economic Research said. It was the lowest since August last year.
The score was worse than the 45 forecast by economists, but much above its long-term average of 24.6.
"The cautious expectations in this month's survey are likely to be caused by the Ukraine conflict, which still creates uncertainty," ZEW said.
"Furthermore, the slight decline in economic expectations has taken place against the backdrop of a very positive evaluation of the current economic situation in Germany."
The current conditions index of the survey rose to 59.5, the highest level since July 2011, from 51.3 in March. Economists had predicted a score of 51.5.
"This very positive assessment of the economic situation may also explain to some extend why a part of the surveyed experts have slightly lowered their expectations for the next six months - in their view the German economy is already growing at a considerable pace," ZEW said.
The economic sentiment index for Eurozone dropped to 61.2 from 61.5 in March. The current conditions index added 6.2 points to -30.5.
Eurozone foreign trade surplus in February increased from a year ago, figures from Eurostat showed Tuesday.
The unadjusted trade surplus rose to EUR 13.6 billion from EUR 9.8 billion in the same month last year. Economists had forecast a surplus of EUR 10 billion.
In January, the surplus was EUR 0.8 billion versus a deficit of EUR 4.8 billion a year ago.
The seasonally adjusted trade surplus for February grew to EUR 15 billion from EUR 13.9 billion in January.
Exports rose a seasonally adjusted 1.2 percent monthly and imports grew 0.6 percent.
"The fact that the surplus has risen by over one third in the last year might suggest that the strength of the euro exchange rate is not having adverse effects on the external sector," Capital Economics economist Jonathan Loynes said.
"However, export growth remains sluggish and the surplus would have shrunk were it not for the weakness of imports, itself presumably reflecting weak domestic demand."
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European Parliament adopts financial markets rules
The European Parliament adopted new rules Tuesday to tighten the regulation of financial markets in order to stop rampant speculation, including on foodstuffs.
The European Union's Financial Markets Commissioner Michel Barnier first pushed for the new rules, known as MiFID II, in 2011 at the height of the eurozone debt crisis and in the wake of the global economic meltdown.
The regulations, still to be formally approved by member states, aim to curb speculative trading in commodities and to regulate high-frequency trading to protect investors and make the markets less crisis-prone.
The new regulations will better serve the real economy, Barnier said in a statement.
"They will establish a safer, more transparent and more responsible financial system and restore investor confidence in the wake of the financial crisis," he added.
They new rules apply to investment firms, market operators and services providing post-trade transparency information in the European Union.
They will notably force market players to buy and sell financial instruments on regulated markets comparable to stock exchanges to ensure that all trading is tracked by MiFID.
Another key provision covers high-frequency trading based on automatic algorithmic systems, forcing investment firms to stop trading if price volatility becomes too high.
To help limit speculation in food and energy, authorities for the first time will be able to limit the size of a net position that a person can hold in commodity derivatives.
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Euro zone inflation stuck in 'danger zone', keeps pressure on ECB
A shock drop in March euro zone inflation to its lowest level since November 2009 was confirmed on Wednesday, keeping pressure on the European Central Bank to intervene should prices not rebound.
The year-on-year inflation rate in the 18 countries sharing the euro was 0.5 percent in March against 0.7 percent in February, the European Union's statistics office Eurostat said.
The biggest rise in prices was observed for tobacco, restaurants and bars as well as milk, cheese and eggs, while lower prices were recorded for heating oil, telecommunications and fuel.
There was a stark disparity across the eurozone with countries such as Greece (-1.5 pct) and Cyprus (-0.9 pct) seeing their prices fall compared to last year.
Inflation rates in Austria (+1.4 pct), Malta (+1.4 pct) and Germany (+0.9 pct) were nearer to the ECB's target of close to but below 2 percent.
Inflation has now been in the ECB's "danger zone" of below 1 percent for six consecutive months, fuelling speculation that the ECB will need to take further action.
ECB policy makers said the bank stood ready to deploy unconventional measures to ensure that inflation did not stay low for too long.
ECB's President Mario Draghi expressed concerns at the euro's strength on Saturday in Washington, trying to talk down the currency, which influences domestic prices.
The strength of the single currency against the dollar makes imports cheaper and pushes down the prices Europeans pay for goods and services.
While this can give households more purchasing power in the short run, the ECB wants to avoid a drop in inflation expectations.
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EU price rises slow, widening deflation threat
Consumer prices in the 28-member European Union rose at the slowest pace for four-and-a-half years in the 12 months to March, indicating that falling inflation rates are a problem for economies throughout the continent, and not just those that share the euro.
The European Union's statistics agency Wednesday said consumer prices in the 18 nations that share the euro were 0.9% higher than in February, and 0.5% higher than in March 2013. That confirmed the preliminary estimate released late last month, and is the lowest annual rate of inflation since November 2009.
Eurostat said the core rate of inflation--which strips out volatile items such as energy and food--slipped to 0.7% from 1.0% in February, matching the record low reached in December 2013.
Eurostat also said the annual rate of inflation in the broader EU--which includes 10 countries that don't use the euro--fell to 0.6% from 0.8% in February, its lowest level since October 2009.
Eurostat's figures show that five euro-zone members experienced declines in prices in the 12 months through March, while three members of the EU that don't use the euro shared the same experience. But other members were on the cusp, with four euro-zone members recording inflation rates below 0.5%, as did four EU members that don't use the euro. Of the EU's 28 members, only one had an inflation rate in excess of 1.5%: the U.K., where prices rose 1.6% in the 12 months to March.
The slowdown in inflation is a mixed blessing. While it should help boost real incomes at a time of weak wage growth, it also raises the specter of deflation--a sustained and self-reinforcing fall in prices that can play havoc with public and private efforts to repay debts and risks bringing consumer spending to a halt.
Policy makers at the European Central Bank have repeatedly said they don't expect to see a period of falling prices across the currency area as a whole. They reject comparisons with Japan, which struggled with deflation for two decades, saying the ECB has acted more decisively than Japan did in the 1990s and that European banks are stronger.
But they have acknowledged that very low rates of inflation are a worry, and in recent weeks have focused on the role of an appreciating euro in pressing down on import prices and activity.
ECB President Mario Draghi Saturday ratcheted up his warnings about the strong euro, saying a further rise in the exchange rate against other currencies would trigger additional monetary easing to keep inflation from falling too low.
"A strengthening of the exchange rate requires further monetary stimulus. That is an important dimension for our price stability," Mr. Draghi said at a news conference during meetings of the International Monetary Fund.
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Swiss April Economic Sentiment Weakens Significantly
Economic expectations for Switzerland deteriorated notably in April, a survey carried out by Centre for European Economic Research (ZEW) in cooperation with Credit Suisse showed Wednesday.
The corresponding indicator fell by 12 points to 7 in April. But it signals stable economic expectations.
The assessment of the current economic situation improved 16.2 points to 59.1 points.
Looking at the Eurozone, respondents forecast a progressing recovery. Their assessment of the current economic situation climbed 11.3 points to the -22.0 points-mark. Likewise, economic expectations gained 8.1 points to a level of 55.8 points.
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German Producer Price Inflation -0.3% vs. 0.1% forecast
Germany’s producer price index fell unexpectedly last month, official data showed on Thursday.
In a report, Destatis said that German Producer Price Inflation fell to a seasonally adjusted annual rate of -0.3%, from 0.0% in the preceding month.
Analysts had expected German Producer Price Inflation to rise 0.1% last month.
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Nice run up for EURUSD today, looks like is trying to catch the Easter bunny!!!
Euro extends gains against softer dollar
The euro rose to session highs against the broadly softer dollar on Thursday as dovish comments by Federal Reserve Chair Janet Yellen curbed investor demand for the greenback.
EUR/USD touched session highs of 1.3864 and was last up 0.29% to 1.3848.
The pair was likely to find support at 1.3802, Wednesday’s low and resistance at 1.3875.
The dollar softened after Fed Chair Janet Yellen said Wednesday that monetary policy will need to remain accommodative for some time, citing slackness in the labor market and low inflation.
Ms. Yellen said the risks of persistently low consumer prices outweighed those of high inflation. She added that the central bank expects the U.S. unemployment rate to fall back between 5.2% and 5.6% by the end of 2016. The U.S. unemployment rate currently stands at 6.7%.
In the euro zone, data on Thursday showed that German producer price inflation fell 0.3% in March from a month earlier and was down 0.9% on the year. This was below expectations for a 0.1% increase on the month and a 0.7% decline on the year.
The report came a day after data confirmed that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.
Core inflation, which strips out volatile items like food and energy costs, fell to 0.7% from 1.0% in February, matching the record low reached in December 2013.
Euro zone inflation has now been in the European Central Bank's danger zone of below 1% for six straight months, fuelling speculation that policymakers will need to implement fresh stimulus measures to shore up the fragile recovery in the euro area.
Over the weekend, ECB President Mario Draghi that further gains in the euro would trigger additional monetary easing to keep inflation from falling.
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German March Producer Prices Fall More Than Expected
Germany's producer prices dropped for an eighth successive month in March and at a faster than expected pace, data from Destatis showed Thursday.
The producer price index (PPI) fell 0.9 percent year-on-year in March, same as in February. Economists had a forecast a fall of 0.7 percent.
Producer prices have declined every month since August last year and the biggest fall in the cycle was in January, when they dropped 1.1 percent.
Prices of consumer non-durables rose 1.3 percent, while those of intermediate goods and energy declined 1.9 percent and 2.6 percent, respectively.
Excluding energy, producer prices dropped 0.3 percent year-on-year in March.
On a monthly basis, the PPI dropped 0.3 percent in March in line with the expectations of economists, after remaining flat in February. In January, prices fell 0.1 percent.
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EURUSD flat markets ahead of easter, but gearing up for a movement
t seems the markets have taken pause ahead of the Easter break, there isn’t much activity across the currencies as most markets remain flat with the weekly candles showing indecision. These stale, low volatility markets can be frustrating for traders but it’s where you must demonstrate the highest levels of discipline.
EURUSD very flat at the moment, it’s like we’ve got the sails up but there is no wind to push the boat along. However the market has tried to rally higher a couple of times and the market has clearly denied these higher prices, closing as bearish pin bar. This could be a signal of what is to come when the markets pick up momentum again.
It’s not recommended to trade in quiet markets like this, but this could be an early tip for further downward movement next week.