The pain points for the euro

16 October, 2015

Since the multi-month run higher in the dollar ended in March of this year, the single currency has always struggled to pull off a sustained move above the 1.15 level against the dollar. We’ve seen this May, June, August, and September, together with yesterday. The reversal has sometimes been assisted by comments from ECB leaders on the currency. Yesterday, we didn’t have direct comments on the currency, but were reminded by Nowotny that the central bank was clearly missing its inflation target, bringing to the fore expectations of further possible QE from the ECB. In a similar manner, EURGBP has also struggled for a strong foothold above the 0.74 level, with yesterday’s euro move seeing the cross move back below this key level. We’re going to see the final print of CPI data in the Eurozone today at 09:00 GMT, with confirmation of -0.1% YoY reading.

The US data is confined to industrial production at 13:15 GMT and Michigan confidence data at 14:00 GMT, neither major releases in terms of dollar impact. In the wider picture, we have seen stocks recover well from the end of September lows, the major US index up nearly 8%. The recovery in emerging market indices has been even stronger at over 11%. The pace of recovery in emerging market currencies has been the strongest seen this year, but this must be remembered that this has come after a sustained period of weakness, characterised by limited and marginal periods of correction. The GDP data from China early next week will be crucial in setting the tone for both EM and developed markets, with move below the 7.0% level anticipated. Retail sales and industrial production data are also released at the start of the week. Weaker data across the board could well test the recent emerging market rally.


Source link  
The precious metal has broken out

The precious metal has broken out from its descending wedge around 1331.00 and moved higher to create a lower high at 1361.80.The price then...

All Focus on US inflation data

The USD has weakened further overnight as the market awaits important US Data at 13:30 GMT. USDJPY broke down under 107.000, while...

Central Bank speakers start a quiet week

UK MPC Member Vlieghe spoke at the Resolution Foundation in London. Some of the comments made were: If there is less credit headwind to the UK economy...


Equities Face a Nervous Session

The global equity markets are bracing themselves for a stormy closing session this week, as data from Thomson Reuters Lipper unit shows US fund...

Super Thursday for the Bank of England

The Bank of England is expected to largely proceed as normal today on ‘Super Thursday’ when the central bank releases its policy decision and statement...

US Nonfarm Payrolls Today

Today is Non-farm Payrolls day in the US. This data release is generally one of the most important of the month, being a leading indicator of consumer...


Australian Dollar drops after soft data

The Australian dollar eased on Thursday following weaker-than-expected economic data. The Australian Dollar took an initial knock on Wednesday on...

Trump Supports a Strong Dollar

Markets have had a volatile session this week thanks to various US officials and yesterday was no exception, with President Trump speaking in Davos...

A Weaker Dollar is Good for the US

Yesterday, Senior US Officials took the lead from their President and made clear the US position on Trade. Commerce Secretary Wilbur Ross...

  


Share: