Doting on Draghi

20 October, 2016

The ECB meeting arrives today when EURUSD is testing key levels. The mid-year lows at 1.0952 is perilously close as I write, whilst the post-Brexit referendum low of 1.0913 being in the frame after that. It’s hard to see the ECB adding to its quantitative easing policy that was last expanded in March of this year, when the deposit rate was also cut by a further 10bp. That does not remove the volatility risks for EURUSD, given the habit of ECB President Draghi to throw in some verbal bombs during the press conference. Inflation remains stubbornly low, although recent rises in energy prices and also the modest fall in EURUSD will add to inflation in the months ahead. All that said, that could not be enough to satisfy the ECB, with expectation growing for more easing measures in December of this year. That’s the same time the Fed is expected to increase rates in the US, so such monetary policy divergence is usually a powerful force in terms of currency direction, which would push EURUSD lower.

The Aussie has fallen overnight on the back of the latest jobs numbers, which showed the unemployment rate steady but the level of employment falling. That took some of the wind from the Aussie’s sails, AUDUSD reversing the gains seen in the previous session. Ahead of the ECB meeting and press conference, there is retail sales data in the UK at 08:30 GMT, where both measures are seen rising slightly from the fall in August, but these numbers are often volatile.


Source link  
Markets Look to OPEC

As OPEC began its 2-day meeting in Abu Dhabi on Monday, to align its members to adherence to output reductions, data from S P Platts revealed that Libya and Nigeria pushed OPEC crude...

BoE Lowers UK Growth Forecast

The Bank of England kept rates at their record low on Thursday, following their latest Monetary Policy Committee meeting. However, the BoE cut forecasts...

Beware Profit Takers

On Thursday US durable goods orders were released showing a 6.5% increase, which was the biggest gain in 3 years, resulting in USD clawing back some of its recent losses....


US Inflation Concerns Pressure USD

The Federal Reserve ended its 2-day meeting on Wednesday with, as expected, no change in US interest rates. The Fed commented that US inflation had declined...

No More Easy Money?

On Thursday, the US Commerce Department released GDP (Annualized QoQ) showing a 1.4% annual rate compared to the 1.2% posted in the previous month. This slight increase shows...

Markets listen to Yellen & Draghi

Central Banks are the key drivers of the markets this week as traders focused on comments made from two major central bankers ECB and Fed...


Markets look ahead to US data

Trading in USD was relatively flat on Friday ahead of economic indicators released next week in the US, which will provide...

Bear Territory for Oil?

Oil continued to trade lower on Thursday as traders look ready to test new lows for crude prices with worries persisting over a global glut...

USD Rises as Investor Concerns Abated

Investor concerns, that low US inflation could deter the Federal Reserve from raising interest rates further this year...

  


Share: