Eur/usd - page 45
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Euro recovers some of post-ECB losses
The euro dropped against the U.S. dollar Thursday after the European Central Bank surprised currency traders with a cut in its benchmark interest rate.
But the euro made up some of its losses after ECB President Mario Draghi said the cut in the refi rate to a record low 0.25% wasn’t linked to the strength of the currency. The euro late last month hit its highest level in nearly two years, making it tougher for exporters and risking damage to the currency bloc’s fragile economic recovery.
The quarter-point rate cut will have “quite limited significance to the extent that money-market rates were already below policy rates,” said Adam Cole, global head of foreign-exchange strategy at RBC Capital Markets in London.
Weak inflation had most recently raised expectations for further easing this year, but most economists had expected no movement on interest rates at Thursday’s meeting.
Draghi said the central bank “continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time.” That indicated the central bank has retained its easing bias, said Cole.
The focus now shift to what the ECB is willing to do as it goes forward, including potentially negative deposit rates, more long-term refinancing operations, and quantitative easing, he added. LTROs are long-term loans provided by the ECB to commercial banks in return for collateral.
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Anticipated scenario form 06.11.2013 was fulfilled yesterday evening. Now we are looking to take a short around the same spot which is 1.3450 – start watching price action above 1.3440 and then we’ll decide about the details of a short trade. Keeping in mind NFP report today, on the picture above we marked good levels to counter trade a spike (up or down). About an hour before NFP news we will stop trading (short @ 1.3450). Interesting observation was a fact of no reaction (no continuation of down move) to France’s credit downgrade to AA by S&P.
ECB wants bank resolution rules drawn up early
he European Central Bank on Friday called for Europe-wide rules for winding up failed banks to be drawn up before it takes over as the region's single banking supervisor.
The so-called Single Resolution Mechanism (SRM) "should be established by the time the ECB assumes full supervisory responsibilities" late next year, the central bank said in a statement.
European member states are currently trying to hammer out the rules for a new banking union in order to avoid a repeat of the bloc's banking crisis that pushed countries such as Ireland and nearly Spain into bailouts.
The new regime not only includes a Single Supervisory Mechanism or SRM, which will be housed within the ECB, but also a resolution mechanism or SRM for winding up failed banks.
"Both the SSM and the SRM are essential parts of the integrated financial framework of the banking union, which will help break the link between banks and sovereigns in the member states and reverse the current process of financial market fragmentation," the ECB wrote.
"The ECB strongly supports the envisaged timeline for the SRM. Under this timeline, the SRM would enter into force by the middle of 2014 and would become fully operational by January 1, 2015," it said.
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France's credit rating cut by S&P to AA
Standard and Poor's (S&P) has cut France's credit rating to AA from AA+.
The moves comes almost two years after the country lost its top-rated AAA status.
S&P said it downgraded France because high unemployment in the country was making it hard for the government to make important reforms which would boost growth,
The French government responded by saying that its debt rating was one of the safest in the eurozone.
S&P said it expected government debt to hit 86% of gross domestic product (GDP) in 2015 and unemployment to remain above 10% until 2016.
The country's Finance Minister, Pierre Moscovici, said S&P had made "critical and inexact judgements".
He said in a statement: "During the last 18 months the government has implemented major reforms aimed at improving the French economic situation, restoring its public finances, and its competitiveness."
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EUR/USD Forecast November 11-15
EUR/USD had a second negative week, losing over 100 pips. Can it stabilize at these levels or continue falling? GDP, employment and inflation data are the main market movers for this week. Here is an outlook for these events among others, and an updated technical analysis for EUR/USD.
The ECB cut the interest rate to 0.25% in its monthly meeting, catching markets by surprise. The weak performance of the euro states, excluding Germany and the overvalued Euro compelled the ECB to cut rates, in an attempt to spur the euro-zone economies. ECB president Mario Draghi also made it clear that he has more “artillery”. EUR/USD fell also on news from the other side of the Atlantic: both GDP and the Non-Farm Payrolls exceeded expectations. We’ll now see how bad the euro-zone situation is.
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Europe and the Zero Bound
As in the U.S., another rate cut isn't enough for faster growth.
The European Central Bank turned heads by cutting its benchmark interest rates by 0.25 percentage points on Thursday, though calling it a dovish move would imply that the ECB has been hawkish. The main refinancing rate sat at 0.5% for six months before this week.
The best argument for a rate cut is that euro-zone inflation has been falling all year and came in below 1% in October. The central bank's sole mandate is price stability, which means preventing excessive price changes in both directions. ECB President Mario Draghi made clear Thursday that the lower inflation outlook was the most important calculation behind the rate cut. The central banker has refused to pretend that a 25-basis-point cut in banks' refinancing rate is the difference between euro-zone salvation and damnation, which can't be said of some commentators.
Mr. Draghi also dismissed fears that low inflation is about to turn into a deflationary spiral. Not long ago, moderately improved business surveys were supposed to presage a strong European revival. Now, "dangerously low" inflation is said to threaten the recovery.
As Mr. Draghi pointed out, recent low inflation is due in large part to stable food prices and falling energy prices, as well as the effect of previous VAT increases dropping out of the data. But even a proper, prolonged dose of low inflation wouldn't be the worst thing for Europe.
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Euro Zone’s Fizzling Growth Seen to Back Draghi Cut Case
Euro-area growth data this week may show the region’s nascent recovery slowing to a crawl, supporting Mario Draghi’s case for an interest-rate cut to help the economy get back to its feet.
Gross domestic product in the region rose just 0.1 percent in the third quarter, according to the median forecast of 41 economists in a Bloomberg News survey. In the 3 1/2 hours before that report on Nov. 14, economists predict a series of data releases to show growth slowing in Germany and stalling in France, with Italy remaining mired in an unprecedented slump.
Such an outcome would confirm that the recovery is grinding after a second-quarter growth spurt of 0.3 percent that ended the region’s record-long recession. The data are due one week after the European Central Bank president’s surprise rate cut to 0.25 percent. Draghi said at the time that the euro zone faces the danger of a “prolonged” period of low inflation.
“There are a few minor bright spots, for example Spain, (SPNAGDPQ) but Italy will continue to remain in contraction and growth in France will likely be flat at best,” said Nick Matthews, a London-based economist at Nomura International Plc. “That plays into the scenario the ECB is seeing, which is a very weak and fragile recovery.”
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During the Asian session the pair traded in the range of $ 1.3345-75
Considering the euro it is advised to trade down with the first target 1.3259.
Good luck!
Portugal Q3 Trade Deficit Narrows Slightly
Portugal's trade deficit for the third quarter narrowed from a year ago, data released by Statistics Portugal showed on Monday.
The trade deficit for the three months to September was EUR 2.663 billion versus EUR 2.801 billion last year. Exports grew 5.8 percent year-on-year, while imports increased 3.6 percent.
Trade with the EU resulted in a deficit of EUR 2.019 billion shortfall, which was larger than the EUR 1.893 billion deficit in the same period last year. Exports and imports grew 6 percent and 6.1 percent, respectively.
In the January to September period, exports increased 4 percent and imports recorded a flat reading.
For the month of September, exports increased 9.8 percent annually, following a 0.5 percent fall in August. Imports rose 3.7 percent, reversing a 3.8 percent slump in the previous month.
On a monthly basis, exports surged 18.7 percent, while imports grew 14.4 percent.
source
Morning, all!!
So... no big movements yesterday, huh?
The price is still in a bearish phase, BUT there's possible bullish price movement towards the resistance 1.353 within the next 3 days.
No big news for today... so probably gonna be another steady one.
Have fun! =)