Eur/usd - page 32
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
French economy returns to growth in 2Q
The French economy returned to growth in the second quarter, aided by stronger domestic demand and a rebuilding of stocks, official statistics showed Friday.
The euro zone's second-largest economy expanded 0.5% in the second quarter compared with the first, statistics bureau Insee said in its final reading of gross domestic product, which confirmed a flash estimate published in August.
This period of growth follows two consecutive quarters of contraction--the common definition of a recession.
The data were consistent with economists' forecasts for the period in the three months to June.
France had been stuck in neutral, providing insufficient growth to prevent unemployment from reaching an all-time high over the summer, although the number of jobless declined in August.
The French economy has fluctuated between mild growth and slight contraction over the past two years.
source ...
Arrest warrant issued against former Cyprus bank chief
An arrest warrant was issued Friday after the former head of Cyprus's central bank failed to appear before a district court for a hearing, the Cyprus News Agency reported.
Athanasios Orphanides, who is currently in the United States, had been due to attend the hearing in the southern town of Limassol in connection with a private lawsuit filed by a resident who had purchased Laiki Bank bonds worth 400,000 euros ($540,000).
Orphanides, now a professor at the Massachusetts Institute of Technology, served as central bank governor from May 2007 to May 2012, when the country was plunged into crisis after Greece's meltdown left several major banks insolvent.
The crisis and subsequent EU bailout forced a number of big depositors to accept reductions in the value of their bank accounts.
"Laiki through its employees acquired 400,000 euros from my client in a fraudulent manner, in collusion with Mr Orphanides," CNA quoted the client's lawyer Costas Melas as saying.
He said neither Orphanides nor his lawyer were present at Friday's hearing. The court was to reconvene November 14 to ascertain the status of the warrant against him.
Demonstrators outside the Limassol courtroom protested against Orphanides, whom they blame for the sale of high-risk products by the banks that eventually caused ordinary investors to lose millions.
Cyprus's two largest banks, Bank of Cyprus and Laiki, issued bonds worth some 1.4 billion euros in 2011 and 2012 that were rendered worthless after the banks suffered huge losses connected to the Greek debt crisis.
In March Nicosia clinched a 10 billion-euro bailout through the International Monetary Fund, which required that it restructure banks, with Laiki wound up and its healthy assets shifted over to the Bank of Cyprus.
But the deal also required that depositors take an unprecedented hit on unsecured deposits above 100,000 euros. Depositors in defunct Laiki lost their savings while those at the Bank of Cyprus took a 47.5 percent haircut.
source ...
Worries about U.S. Budget, Debt Ceiling Drives EUR/USD Higher
The EUR/USD soared on Friday, but the rally fell a little short of taking out the recent top at 1.3568. Nonetheless, the strong finish for the week has the market in a position to continue the rally next week.
The market was trading steady early in the U.S. session as investors took protection against a potential government shutdown on October 1. The Forex pair rallied after the release of a consumer sentiment report fell to 77.5 in September, its lowest level in nearly five months. The number missed the estimate of 78.0 but was still above the mid-month preliminary reading of 76.8.
read more ...
Romania gets EUR 2 bn IMF standby aid
The International Monetary Fund approved Friday a standby loan of nearly two billion euros ($2.7 billion) to match a backup loan of the same size requested from the European Union.
The IMF loan is a two-year standby arrangement for 1.98 billion euros, to give the government space to continue reforms.
"The authorities have informed the IMF that they intend to treat the new arrangement as precautionary, and therefore do not plan to draw under it," the Fund said.
Romania also requested "precautionary support" of two billion euros from the EU, it said.
Romania has progressed under economic programs supported by two previous IMF standby loans, the Fund said, cutting its fiscal deficit and shortfalls in external accounts, and launching other structural reforms.
However, the IMF said the Romanian economy had not rebounded to its pre-crisis level.
"The economy is still vulnerable to external shocks, including volatile capital flows, and the reform agenda remains unfinished," said Nemat Shafik, IMF first deputy managing director.
She said the country needed reforms in the transportation and energy sectors to improve the business climate.
She urged the continuation of a gradual deregulation of energy prices while ensuring protections for the most vulnerable consumers.
source ...
Europe Week Ahead: ECB Meeting, EZ PMI, -HICP, UK PMI
From a global macro perspective, there is little change to expect from the ECB at its upcoming policy meeting, which will be held exceptionally on Wednesday in Paris. The gradual, albeit steady improvement in leading economic indicators has removed the need for a policy rate cut for now. However, a cross-check analysis based on the monetary pillar remains consistent with the ECB’s easing bias and forward guidance, as reflected in the further contraction in bank credit flows to the private sector this week. Eurozone inflation reaching new lows in September (flash HICP expected next week) will only strengthen the argument. Meanwhile the perceived confusion and challenges facing communication by the Fed and BoE will likely comfort the ECB in its decision to leave its own forward guidance settings deliberately vague, benefiting from such ‘constructive ambiguity’. The combination of the Fed’s ‘non-taper’ decision and the ongoing LTRO chatter has helped to ease the tensions in Euro money markets, reducing the sense of urgency to act on the ECB’s side. Therefore, while we believe that the likelihood of another LTRO will continue to rise, on balance we do not expect any pre-announcement as early as next week even though the ECB will remain ‘ready to act’.
We look for Eurozone flash HICP inflation to decline to a new low of 1.2% YoY in September (from 1.3% in August), with modest downside risks. Oil prices in EUR terms have dropped by 8% so far in September, weighing on the HICP energy component to a larger extent than we had expected. Meanwhile low underlying pressures on prices and wages should keep core inflation in check alongside positive VAT-related base effects in Spain, in particular. The publication of Final PMI indices will be of interest as well, with the market likely to focus on business confidence in the periphery. When the flash PMIs were released, Markit noted that activity outside Germany and France was “the strongest since early 2011”, boding well for peripheral PMIs, especially in the services sector this month.
The UK manufacturing PMI index is likely to give up part of its recent gains, in our view, even though recent data has remained largely positive. Coming from below 50 in Q1, the index rose to above 57 last month while, to be consistent with our forecast of a deceleration in GDP growth in Q4, a more ‘reasonable’ level for the UK PMI would likely be closer to 55, eventually, given also the still subdued pace of activity expansion expected in the Eurozone
source ...
Italian government collapsed – EUR/USD could start lower
The Italian crisis deteriorated fast: ex-PM Silvio Berlusconi pulled his ministers out of the coalition government led by Enrico Letta, leaving it hanging in the air. With political parties blaming each other for the cause to the crisis, the ball returns to the court of president Giorgio Napolitano, who is trying to negotiate a new government and avoiding fresh elections.
Italy is the euro-zone’s third largest economy. EUR/USD could certainly open lower with a Sunday gap after this development.
Italy did not manage to pass new economic measures on Friday, and the government collapsed on Saturday, but PM Letta says the reason is not the economic differences, but rather Berlusconi’s personal status.
The Italian crisis was on the back burner for quite a while, and now it is on the front page, trying to take away the spotlight from the potential US government shutdown.
source ...
EUR/USD Forecast Sep 30. – Oct 4.
EUR/USD consolidated its gains from the previous week, unable to pick a new direction just yet. The rate decision and its accompanying press conference, as well as final PMIs are the highlights of this week. Check out these events and more as well as an updated technical analysis for EUR/USD.
The German elections saw a victory for Merkel, but the lack of a clear majority now puts the euro-zone’s locomotive in a long period of coalition negotiations and uncertainty. Positive news came from climbing services PMI’s but the disappointing German business confidence reading. With somewhat tighter conditions in financial markets, will Draghi follow through and announce a new liquidity program (LTRO) for European banks? In the US, the due dates for a government shutdown and even a technical default due to the debt ceiling are getting closer, and this weighs on the dollar. What’s the next move for the pair? Let’s start.
read more ...
Italian president hopes to solve political crisis without new vote
Italian Prime Minister Enrico Letta will meet the president on Sunday to try to chart a way out of a deep political crisis after Silvio Berlusconi pulled his ministers out of the government and called for new elections.
President Giorgio Napolitano said he would only dissolve parliament as a last resort but just seven months after the last vote it is not clear if an alternative majority can be found.
Berlusconi, the center-right former prime minister who was forced from office in November 2011 at the height of the euro zone debt crisis and faces a ban from parliament for tax fraud, has already launched his election campaign.
On Sunday he attacked Letta's government and demanded a vote "as quickly as possible", but said his party would still vote for the 2014 budget, which must be presented next month, on the condition the package of measures "is really useful to Italy".
Infighting among the left-right coalition government has thwarted efforts to push through reforms Italy needs to emerge from a two-year recession, a 2-trillion-euro public debt and youth unemployment of around 40 percent.
The political paralysis resulting from the government's collapse will delay those reforms even further in the euro zone's third largest but most sluggish economy.
"It is tradition for the president to dissolve parliament early when it isn't possible to create a majority and a government for the good of the country," Napolitano told reporters ahead of his meeting with Letta.
read more ...
Feeling Pressure from Resistance at 1.3550
Over the last couple of weeks the Euro has traded within a narrow range between 1.3450 and 1.3550 as the latter level has established itself as one of significance providing reasonable resistance. For some time now, the 1.34 level had been causing the Euro headaches however a couple of weeks ago it surged higher and moved through there to its highest level since February just shy of 1.3570. It finished that week slightly lower just below 1.3530 and in the first few days of last week, it slowly but surely eased a little lower to just under 1.35. Several weeks ago the Euro fell strongly away from the resistance level at 1.34 back to below the support level at 1.32 and in doing so traded to its lowest level in seven weeks very close to 1.31. Despite a couple of rallies back above 1.32 a few weeks ago, it continued to drift lower and fall below 1.3150. For about a week or so several weeks ago the Euro was placing upward pressure on the 1.34 level however it stood firm just like it has done so for the last few months. About a month ago the Euro made a run at the 1.34 level only to be turned away yet again and ease back under – this was the story for several weeks.
The surge higher a couple of weeks ago is significant as despite its persistent attempts to push through the 1.34 level on many occasions, it had only been consistently repelled with ample supply. Looking at the bigger picture the Euro has spent most of the last six weeks or so trading within a range between 1.32 and 1.34 and more recently pushing its range to between 1.3450 and 1.3550. Back in early July the Euro was content to maintain the level above 1.31 and settle there, as it received solid support from both 1.30 and 1.31. On a couple of occasions it made an attempt to move within reach of the longer term resistance level at 1.32 and finally it finds itself trading on the other side of this level and being well established there. It has been some time since the Euro has experienced a 24 hour period with as much range as the period earlier in July when it surged higher from from below 1.28 up to above 1.32. Prior to that jump, the Euro had been in a very solid medium term down trend after succumbing to the resistance at 1.29 and moving down below the key long term level of 1.28. This resulted in it trading at a multi-year low near 1.2750.
Throughout May and most of June the Euro surged higher to a four month high above 1.34. Before that in the first half of May, the Euro fell considerably from near 1.32 down to six week lows near 1.28. Back at the beginning of April the Euro received solid support around 1.28 and this level was called upon to provide additional support. Throughout this year the Euro has moved very strongly in both directions. Throughout February and March the Euro fell sharply from around 1.37 down to its lowest level since the middle of November around 1.2750. Sentiment has completely changed with the Euro over the last few weeks and the last couple of months has seen a rollercoaster ride for the Euro as it continued to move strongly towards 1.34 before falling very sharply to below 1.29 and setting a 6 week low.
read more ...
Italy's political crisis hits the financial markets
The financial markets have been rattled by Italy's deepening political crisis.
Italian shares fell more than 2% and the euro fell to the lowest level since June against the Swiss Franc.
Italy's 10-year bond yield - an indication of how much the government has to pay to borrow money - rose as high as 4.66%, the highest level in more than 3 months.
Prime Minister Enrico Letta plans to hold a confidence vote on Wednesday, to seek the backing of Italy's parliament.
He was forced to make that move after five ministers from Silvio Berlusconi's party stepped down at the weekend.
But those ministers have now given mixed signals as to whether they are actually leaving the government.
The crisis follows weeks of worsening ties between Berlusconi's party and Mr Letta's grouping.
Berlusconi's People of Freedom (PDL) objects to a planned increase in sales tax, which is part of wider government policy to reduce big public debts.
The Italian economy is in a dire state.
It is forecast to shrink by 1.4% this year according to the national statistics agency.
The agency also estimates that unemployment will reach a record high of 12.3% next year.
source ...