Eur/usd - page 242
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EUR/USD: Euro Shies Away From $1.10
The European single currency came off its overnight high and was seen trading slightly lower ahead of the European open on Tuesday. However, overall the euro is still holding its ground against the greenback, which is not ideal for European equities.
The euro shied away from heading towards $1.10 and pulled back from the previous session high of $1.0966, losing 0.13% to $1.0929, after it hit a fresh daily low of $1.0903 earlier.
The euro bounced off it's 12-year lows seen in the previous week mostly on a weaker dollar, which retreated following rates lift-off expectations.
"After last week’s move through 1.1000 got rebuffed at the trend line from the December highs, we’re now looking to retest this line, now at 1.0960. A break through here could well retarget a stronger move towards the 1.1250 area, with 1.1050 the first stop. Support remains down at the 1.0800 level," analysts from BNP Paribas said.
There is a a raft of manufacturing and services PMIs on today's euro zone schedule, with expectations of a slight improvement, which would play in favor of stronger equities. On the other hand, Greek Prime Minister Alexis Tsipras is currently visiting Berlin, which definitely puts volatility into headline risk.
Monday saw the focus switch to Fed vice chair Stanley Fischer, who gave a comprehensive view of what he expects from policy going forward. Fischer feels a rate hike is likely warranted this year and the path thereafter is unlikely to be steady. Instead, it’ll continue to be data-dependant, which essentially means there is no rush unless data is shooting the lights out.
Loretta Mester was also on the wires saying a June lift-off is still a possibility. However, given what we’ve recently heard, this seems far too soon.
source
EURUSD has been rallying hard since chances of a Fed rate hike have diminished as the likelihood of a rate hike has diminished, partially because the speculation of a rate hike drove up the USD in the first place! Short-term the trend is extremely bullish and the bounce has taken the shape of a v-shaped correction (strong bullish signal), but the Euro structural problems remain along with the longer-term downtrend.
The EUR/USD failed to break the psychological resistance 1.1000 and consolidate under the resistance.
"EUR rebound starting to run out of steam"
More from BNP, they say the "EUR rebound starting to run out of steam"
Expect the German IFO data (due out later today, during the Europe session) to strengthen - see it rising to 107.3 9ps. that's the consensus Bloomberg forecast too ... prior was 106.8)
EUR/USD: Euro Proves Resilient Above $1.09, German Ifo in Focus
The euro traded in a tight range during the Asian session on Wednesday and remains resilient versus the greenback, which points to a lower European open.
"Given FX moves have played a key role in how equities have performed, perhaps the fact we’ve hardly seen any big moves in key currency pairs recently has contributed to the lacklustre price action we are currently seeing," Stan Shamu from IG wrote on Wednesday.
"It’s almost as if the USD is a sleeping giant at the moment and we probably won’t be seeing much volatility in equities either until it awakes," Shamu added.
The euro was trading in a narrow range of only some 40 pips, but remained steady despite the greenback managing to stabilize prior to Tuesday's core US CPI, the Markit manufacturing PMI, and new home sales, which all delivered positive surprises suggesting the greenback will continue to find demand.
EUR/USD added slight gains, up 0.07% to $1.0931 ahead of the European open.
The bottom line is there is still a significant amount of divergence between the US and the rest of the world and it’s just a matter of time before US data reignites the greenback.
On the Federal Reserve (Fed) front, St Louis Fed President James Bullard said on Tuesday that zero rates are no longer appropriate and he is calling for a hike in June.
Given yesterday’s broadly positive German PMI, expectations are high that today’s Ifo business survey will be similarly positive despite last week’s slightly underwhelming ZEW survey, which came in considerably short of expectations. Expectations are for an improvement in the March business climate to 107.3 from 106.8.
Later today in the US, traders will focus on February's US durable goods orders, a speech from Chicago Fed President Charles Evans, while a crude oil inventories report is also due.
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German Business Captains' Optimism Soars in March: Ifo
Business sentiment among Germany's top executives improved again in March, the Institute for Economic Research showed in its Ifo survey on Wednesday, confirming a modest recovery in the country is taking hold.
The headline Ifo Business Climate Index rose to 107.9 during the third month of the year, above the 106.8 booked in February.
Analysts had forecast 107.3 points in the reported period. The gauge has shown a rising tendency for the fifth successive month.
Current assessment, expectations
Meanwhile, the Current Assessment sub-survey, indicating current conditions in the euro area's number one economy, booked 112 points, after the previous month's figure of 111.3 and in line with estimates.
Moreover, the Ifo Expectations Index - indicating firms' projections for the next six months - booked 103.9, from 102.5 in February, after estimates had called for a reading of 103.
ZEW, PMI
The Ifo survey is another in a series of reports that shed more light on the health of Germany's economy after the ZEW index and PMI data released over the past week pointed to improving conditions as well.
Last week the ZEW Economic Sentiment survey signaled the positive mood swing in business sentiment in Germany, with investors' confidence improving for the fifth consecutive month, suggesting solid, if not spectacular, growth for Europe's largest economy.
Moreover, preliminary data from the manufacturing and services sectors pointed to improving conditions as well, providing further encouraging news for Germany’s private sector economy, with output and new order growth accelerating to the quickest since the summer of last year.
Germany's economy to boost euro zone growth
Germany's Bundesbank, the country's central bank, has recently released its monthly report in which it says momentum in the nation's economy is about to gain, with strong economic growth in the first half of 2015.
"The German economy, following surprisingly strong growth at the end of 2014, should have continued to grow strongly in the first quarter of 2015," the central bank said in its monthly report.
The weaker euro, low borrowing costs and subdued energy prices should be the main factors behind stronger growth in the country, as well as the aggressive easing program recently kicked off by the European Central Bank in an effort to lift inflation and shake the 19-nation bloc out of its economic torpor.
EURUSD initially rallied but found enough resistance at a 61.8 Fibonacci retracement to turn around and close near the low of the day. Nothing fundamental as change so the long-term trend is still bearish, the strategy is to short rallies below the 1.1034.
Is The Euro Ready To Rally?
The past year has been rough on the EUR/USD. How bad was it? The bottom section of the above chart looks at the 52-week rate of change on the euro, which shows that EUR/USD had its worst one-year decline in its history.
The decline has driven the EUR/USD to a potential cluster of support (top red rectangle).
The historic decline in the EUR/USD has had a big impact on sentiment. The chart below from Sentiment Trader, reflects that just 19% of investors are bullish the Euro at this time.
Does it seem crazy to think that the euro could actually bounce? I can understand if you feel that way, as the trend for sure is lower at this time.
I like this theme…its not the odds of something happening that is key, its the impact if it does. The odds might be low that the euro rallies, but if it does, the impact could be rather big since such extremes are in play.
If the euro does rally, odds are decent that the metals complex -- gold, silver and the miners -- will benefit.
Stay tuned, friends, this could get interesting. If the euro does rally, it would surprise a lot of investors, 89% of whom are now bullish the USD -- and that's a record high.
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for the second day the price fail to break the resistance level 1.1000 and fall back.
German Gfk consumer climate 10.0 vs. 9.8 forecast
Germany’s Gfk consumer climate rose more-than-expected last month, data showed on Thursday.
In a report, research group Gfk said that its index of Germany’s consumer climate rose to 10.0, from 9.7 in the preceding month.
Analysts had expected Gfk consumer climate to rise to 9.8 last month.