Eur/usd - page 114
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ECB's Visco sees no evidence of deflation in euro zone
Italy's central bank governor Ignazio Visco said on Thursday he saw no obvious signs of deflation in the euro area.
"There is no obvious evidence of a deflationary move (in the euro area)," said Visco, who is also a member of the Governing Council of the European Central Bank, during a speech in Athens.
Earlier on Thursday, ECB Vice President Vitorio Constancio told the same conference that a protracted period of low inflation in the euro area was a low-probability scenario but that the ECB stood ready to proceed to broad-based financial asset purchases to avert it, if needed.
The euro rose to a more than one-week high against the dollar on Thursday, one day after the Federal Reserve indicated that interest rates will remain low for a considerable time after the bank’s asset purchase program ends.
EUR/USD was up 0.29% to 1.3632, the highest since June 9, from 1.3543 late Wednesday.
The pair was likely to find support at 1.3550 and resistance at 1.3670.
The dollar weakened broadly after the Fed gave no indication of when interest rates could start to rise at the conclusion of its two-day meeting on Wednesday. In addition, the Fed’s forecast of where interest rates might reach in the long term fell from 4% to 3.75%.
The central bank cut its bond purchases by $10 billion a month, to $35 billion, saying there was "sufficient underlying strength" in the U.S. economy to continue tapering.
The central bank acknowledged the recent increases in inflation and drop in unemployment, but said it still expects interest rates to stay low for a “considerable time” after bond-buying ends.
The euro was boosted as borrowing costs in the peripheral euro zone fell back towards recent record lows on Thursday, as euro zone bonds advanced. Spain’s 10-year yield fell to 2.66%, while France 10-year yield dropped to 1.67%.
Euro zone bond yield have been driven lower since the European Central Bank cut all its main rates to record lows and imposed negative deposit rates for the first time earlier this month, pushing investors into riskier assets to boost returns.
sourceHi
I like that . thanks mate.
Peace
i can see a double top on the 1 hour and 30 minutes frames i guess price is going to test 1.36 levels support
i can see a double top on the 1 hour and 30 minutes frames i guess price is going to test 1.36 levels support
It is testing it. More likely tomorrow
German Producer Price Inflation -0.2% vs. 0.2% forecast
Germany’s producer price index fell unexpectedly last month, official data showed on Friday.
In a report, Destatis said that German Producer Price Inflation fell to a seasonally adjusted annual rate of -0.2%, from -0.1% in the preceding month.
Analysts had expected German Producer Price Inflation to rise 0.2% last month.
A warning to the Short skippers, EURUSD broke through the 1.36 level to the upside, dangerously close to levels that could spark a short squeeze in positions implemented post-ECB announcement.
We Need a Freaky Forex Friday
EURUSD focus back to 1.36 as suggested in yesterday's video
Daily Forex Trading Outlook
We Need a Freaky Forex Friday - YouTube
the eurusd is now under support 1.36 level but still it didnt close uder it to make it a valid break but im more worried about 1.3585 levels its a very strong support line
That is totally unpleasant news.
So, we have to keep on eye on the pair.
But thanks anyway.
IMF Urges ECB to Consider Rolling Out Quantitative Easing Measures
The European Central Bank should start rolling out quantitative measures if inflation in the euro area remains low, suggested the International Monetary Fund.
IMF Managing Director Christine Lagarde told reporters on Thursday that the stubborn inflation, which has defied other intervention measures, justifies the using quantitative easing measures to reverse the situation.
“If inflation remains stubbornly low, the ECB should consider a large-scale asset purchase program,” said the Washington-based IMF, according to Bloomberg. “This would boost confidence, improve corporate and household balance sheets and stimulate bank lending.”
IMF noted that the 18-nation euro zone economy is still weak, saying that output still remains far lower than the levels reported just before the financial recession. It also noted that unemployment level, at 11.7 percent as of April, is too high, and that the 0.5 percent inflation in May is “worryingly low”.
The ECB was widely expected to introduce quantitative easing on June 5, but it instead slashed deposit rate to -0.10 percent, reduced interest rates to record lows and injected further liquidity in a bid to boost lending to businesses.
However, a key ECB Executive Board official Benoit Coeure said that while the central bank agrees with IMF stance, the bank will only resort to the unconventional measures if inflation stays too low much longer, a situation he described as having not been arrived at. One of these measures include asset-purchase program.
ECB’s policies appear to be working after a measure of overnight interest rate in euro, the euro overnight index average (Eonia) declined to nearly zero, meaning banks won’t gain anything from depositing funds. The Eonia index rate stood at 0.01 percent on Thursday, pushing interest rates on loans lower. Low interest rates mean more lending to banks and households across the euro zone, which boosts liquidity, and probably result in inflation ticking up.
source