Eur/usd - page 170
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I think the FED will start to pull USD back against the main currencies, or the damage will be big for them
Germany’s Economy Is Weakening Fast
Over in Europe, one of the worst-performing stock markets is in Germany. The German MSCI is down 15.3% YTD. This reflects the dramatic weakening in Germany’s economy in recent months. The Eurozone’s recovery since last summer was very slow and fragile.
The region’s economy seems to have been especially hard hit by the Ukraine crisis and the sanctions imposed against Russia. That’s especially so for Germany, where manufacturing orders dropped 5.7% during August to the lowest level since May 2013. Industrial production excluding construction plunged 4.3% during the month to the lowest since January 2013. The situation might have actually worsened during September given that Germany’s M-PMI dropped below 50.0 to 49.9, the lowest since June 2013. This series is highly correlated with the expectations diffusion index of the Ifo Business Climate Index, which dropped below zero for the first time since January 2013.
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We are seeing the largest bullish correction in EURUSD that we have seen in months. That alone would be enough to give us pause but the pair is now above its 10 day moving average in a highly oversold environment. While the daily trend still remains strongly bearish the short-term trend is in danger of becoming bullish with a break above 1.2700.
Dollar has been lower this week with the market discounting what appears to be a weaker global growth.
the correction is moving with a strong momentum with a bullish RSI and breaking all resistance levels I think it's a good time to enter the market buy
Above 1.2700 expect the short-squeeze to continue toward 1.2780-1.2820 where we should see plenty of bearish selling. The daily trend remains bearish (for now) though we are in the second day of action above the 10-day moving average, leading us to believe we are at least seeing some sideways consolidation before another leg downward.
German exports plunge by largest amount in five-and-a-half years
German exports slumped by 5.8 percent in August, their biggest fall since the height of the global financial crisis in January 2009, in yet another sign that Europe's largest economy is faltering amid broader euro zone weakness and crises abroad.
The Federal Statistics Office said late-falling summer vacations in some German states had contributed to the fall in both exports and imports, but the figures still painted a gloomy picture for Germany following steep drops in industrial orders and output data earlier in the week.
They are likely to intensify a debate over whether Chancellor Angela Merkel's government should be ratcheting up public investment in infrastructure instead of prioritizing deficit reduction.
"We are no longer growing," said Volker Treier, chief economist at the German Chambers of Commerce and Industry (DIHK). "We have had too little investment in Germany for years now."
Carsten Brzeski, an economist at ING, added: "No more Sommermaerchen (summer fairy tale) but rather a German summer horror story."
The data showed seasonally adjusted imports falling 1.3 percent on the month, at odds with expectations in a Reuters poll for an increase of 1.0 percent. Exports had been expected to fall by a more modest 4.0 percent after rising 4.8 percent in July.
The trade surplus stood at 17.5 billion euros, down from 22.2 billion euros in July and less than a forecast 18.5 billion euros.
Germany's economy had a strong start to the year but shrank by 0.2 percent in the second quarter. Evidence is mounting that it barely grew in the third quarter and some economists are forecasting another contraction in that period, which would amount to a technical recession.
On Tuesday, the IMF slashed its 2014 growth forecast for Germany to 1.4 percent from 1.9 percent, and its 2015 forecast to 1.5 percent from 1.7. Later on Thursday a group of leading economic institutes is poised to sharply cut its forecasts for German growth.
The poor data comes at a time when pressure is mounting for Germany to use its healthy budget situation to boost public spending and spur growth in Europe.
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The USD continues to fall today in some cases significantly.
Against the AUD more than 1% and 1.8% against the NZD.
The dollar was stable until the release of the FOMC minutes ... then. the party started!
EUR/USD erases gains after upbeat U.S. data
The euro erased gains against the U.S. dollar on Thursday, as the release of upbeat U.S. jobless claims data lent support to the greenback although the Federal Reserve's most recent policy meeting minutes continued to weigh.
EUR/USD pulled away from 1.2791, the pair's highest since September 24, to hit 1.2716 during U.S. morning trade, down 0.15%.
The pair was likely to find support at 1.2621, Wednesday's low and resistance at 1.2864, the high of September 24.
In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending October 4 decreased by 1,000 to 287,000 from the previous week’s revised total of 288,000.
Analysts had expected jobless claims to rise by 6,000 to 294,000 last week.
The dollar had weakened broadly after the minutes of the Fed's September 16-17 policy on Wednesday showed that a number of officials believe the bank's current language painted the wrong picture on the timing of rate hikes and that an interest rate rise should be tied to U.S. economic progress.
The minutes also showed that the U.S. central bank cut its growth outlook due to the higher dollar and concerns over global weakness.
The euro was also lower against the pound, with EUR/GBP shedding 0.20% to 0.7860.
Also Thursday, the Bank of England voted to keep interest rates on hold at 0.5% and to keep the size of its asset purchase program unchanged at £375 billion, in a widely expected move.
The minutes of the meeting, due to be published in two weeks, would indicate how many monetary policy committee members voted in favor of a rate hike. The MPC was split in September for the second consecutive month, with two members voting in favor of a rate increase and two against.
source
ECB's Draghi says expects lending to pick up soon in 2015
European Central Bank President Mario Draghi said on Thursday he expects bank lending, a key impediment to growth in the euro zone at the moment, to pick up early next year.
The ECB is putting the euro zone's 131 largest banks through a thorough balance sheet review to weed out soured loans and check whether they have valued assets correctly before it takes over as their new centralized supervisor in November.
Draghi said since the summer last year, banks that will come under its direct watch from November had strengthened their balance sheets by almost 203 billion euros, through capital hikes, bond issuances or retained earnings for instance.
The clean up will put banks in a better position to lend, which is important for the recovery in the euro zone that relies strongly on bank funding.
"I expect credit to pick up soon next year," Draghi said in a keynote speech at the Brookings Institution.