Eur/usd - page 130
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German Producer Price Inflation 0.0% vs. 0.1% forecast
Germany’s producer price index remained unchanged unexpectedly last month, official data showed on Monday.
In a report, Destatis said that German Producer Price Inflation remained unchanged at a seasonally adjusted annual rate of 0.0%, from -0.2% in the preceding month.
Analysts had expected German Producer Price Inflation to rise 0.1% last month.
Swiss Money Supply Growth Eases Sharply In June
Switzerland's money supply growth eased sharply in June, figures from the Swiss National Bank showed Monday.
M3, the broad measure of money supply, grew only 4 percent year-on-year in June, slower than the 8.1 percent increase seen in May.
Meanwhile, the narrow measure, M1 growth accelerated to 4.7 percent from 4.1 percent in in May.
Reserve assets of Switzerland fell to $544.67 billion in May from $548.86 billion in April, data showed today.
EURUSD initially fell during Friday’s session, but found reasonably support at the 1.35 handle. This area has been supportive for some time now, and is the bottom of a larger consolidation area.
We have the 1.3642 level as a resistance area, and as a result the market could be bought on a break above the high of the hammer as it shows that the bottom of this consolidation area does in fact continue to prove itself.
I hope tomorrow will be movement on the price for today I don't think price will change much
Schaeuble warns ECB on asset bubbles
German Finance Minister Wolfgang Schaeuble warned the European Central Bank on Sunday that a loose monetary policy runs the risk of causing asset bubbles.
"We can't just leave the avoidance of bubbles to government supervision," he told the Handelsblatt business daily. "Central banks also need to keep an eye on that in their decisions about the money supply."
Schaeuble, speaking in a joint interview with his French counterpart Michel Sapin, said that "in parts of the property market there are signs that bubbles are forming", reiterating earlier warnings.
But he rejected a French proposal for a targeted depreciation of the euro in pre-release extracts of the interview, which is due to be published in full on Monday.
"I do not believe in political discussions about the exchange rate, which is set by the market," he said, adding that government intervention had "never led to a good result".
Schaeuble backed the European banking union as a big step in the right direction and said he did not foresee major problems in the "stress tests" of the bloc's banking sector.
The EU's banking union, which is expected to become operational in November, will give the ECB the power to supervise eurozone banks and prevent bank failures.
"The examination of assets and the stress test are not yet completed. But the banks have raised a lot of extra capital," he said, adding that now "the risk of contagion is much smaller".
Sapin, meanwhile, stressed that Paris is committed to the strict deficit rules laid out in the European Stability Pact.
"The rules exist, the treaties exist. Nobody is challenging them, and I would not recommend it to anyone, especially not in France," he said.
"I want to stick to the European rules and, together with partners, find the right timing to lower our spending and deficits and at the same time support growth."
He also spoke out for the French candidacy for European economic commissioner, saying "it is legitimate that France holds an important position within the Commission".
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if we see good number of The Core Consumer Price Index then we are free to go short on eur/usd but for i will wait and see wait will happen with The Core Consumer Price Index before to open a trade
Draghi Cedes Euro Control to Yellen on Fed Rate Wagers
Mario Draghi’s ambitions to weaken the euro are at the mercy of Federal Reserve Chair Janet Yellen.
The U.S. central bank chief sent the euro sliding below $1.35 last week for the first time since February when she said U.S. interest rates may rise sooner than investors expect. Her European Central Bank peer is having less impact: Draghi’s unprecedented decision to drop a key interest rate to below zero last month pushed the shared currency up 0.2 percent before Yellen’s speech. The euro is also losing its link with the continent’s bond market, as its correlation to the yield spreads of Italy, Spain and Portugal approaches zero.
Dealers in euro-dollar, the world’s most-traded currency pair, say they’re increasingly influenced by the U.S. because they’ve assimilated the interest-rate cuts Draghi unveiled and concluded he has no further surprises in store. The prospect of a Fed rate boost is also deemed more important than the conflict in the Gaza Strip and international anger over the downing of a Malaysian airliner last week in Ukraine.
“The market is completely ignoring the European news,” Brad Bechtel, the managing director of Faros Trading LLC in Stamford, Connecticut, said yesterday in a phone interview. “So when the dollar moves, it’ll move, but anything European-specific is not enough. Euro-dollar is also seemingly ignoring all geopolitical noises, whether it’s Russia and Ukraine or Gaza.”
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EURUSD tried to rally during yesterday session, but the market failed to hang onto the gains, and turned around moving lower showing a struggle around this area (1.3500 up to 1.3550).
Looks like is going to test the last swing low at 1.3490 or even test the lower support zone at 1.3476.
EUR/USD Gives Up 1.3500 As Sentiment Sours
The dollar rose across the board with EUR/USD tumbling below the key 1.3500 level in morning European dealing today as the conflict in Ukraine is clearly starting to weigh on the pair. There was no specific news to move the pair, but as we noted yesterday, the accumulation of geopolitical stress and the elevated level of tension between Russia and the EU has cast a pall over investor sentiment in the region and traders fear that political conflict will result in a slowdown of economic activity.
EUR/USD slipped to a low of 1.3480 before rebounding slightly as currency markets are becoming increasingly more wary of the economic conditions in the region. With demand in the EZ still very tepid any further geopolitical shocks could tip the periphery economies back into a recession which would likely weigh more on the unit.
This week the market will get a glimpse at two key pieces of data - the EZ flash PMIs and the IFO report and if both of those release disappoint, the EUR/USD could drift towards the 1.3400 level as further liquidation kicks in.
Meanwhile in UK, Public Sector Net Borrowing figures showed a bigger deficit than expected at 9.4B vs. 9.5B eyed. More importantly, the prior month's results were all revised to show higher than expected deficits suggesting that despite the strong growth in UK economy fiscal spending remains a serious problem. UK public sector net debt ex financials now stands at 77% of GDP - the highest on record.
The news may give the BoE pause with respect to consideration of any monetary tightening as any hike in rates will increase the UK government's cost of borrowing and only contribute to the deficit. The focus for the pound this week will be the BoE minutes with traders eager to see if any MPC members has moved to a hawkish stance.
Cable for now remains capped at the 1.7100 mark, with the pair consolidating in tight 1.7060-1.7080 range for the past two days. If consensus views shift to the idea that BoE will not hike before 2015, the pound could be in for further profit taking as the day proceeds.
In North America today the market will get a look at the CPI and Existing Home Sales data. Expectations are for a slight drop in core readings, but if the numbers prove to be hotter, the dollar could see a further boost as pressure on the Fed to hike rates will increase. With US economic activity continuing to expand and price pressures rising the FOMC will find it hard to maintain its dovish bias. On the other hand, if the data is tame the buck may give up some its overnight gains, especially if US bond yields begin to drift toward the 2.40% level.
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I think we have an early reaction on today's data