Tuesday’s recovery in the Euro was impressive, with the single currency able to shake off much of the negative sentiment towards it and muster a rally back towards 1.2800. Still, at this point, last Friday’s high is key and a break above 1.2880 will be required to officially alleviate downside pressures and open a more significant short-term correction. The
The European leaders agreed to a fiscal compact but failed to secure changes to the EU treaty over the strenuous objections of UK at the EU summit today causing disappointed investors to sell the EUR/USD in Asian and early European trade, but the pair found support at the 1.3300 level and stabilized ahead of the North American open.
Fundamental Headlines
European Session Summary
The beginning part of the week featured a major sell-off and capital flight to the safe haven currencies, the Japanese Yen and the U.S. Dollar, as liquidity conditions tightened across global markets. Short-term funding concerns are becoming increasingly prevalent in the Euro-zone, driving investors out of higher yielding currencies and into more liquid, secure assets. Although these concerns remain elevated, at least on a technical basis, markets were due for a correction headed into Friday trade as the U.S.
Fundamental Forecast for the Euro: Bearish
The Euro ended the trading week on a bright note, posting the largest daily rally in two weeks and trimming its weekly loss to just 0.2 percent on average against the major currencies.
The short covering rally in EUR/USD ran out of steam in early European trade today after Spain’s Economics Minister Elena Salgado said that plans to extend the EFSF fund to 2 Trillion euros were not on the table. Her comments dampened hopes that EZ fiscal officials would be able to create a European style TARP that could address the growing sovereign debt crisis in the region. D
The jump in EUR/USD following the European Central Bank (ECB) yesterdays press statement post its decision to hold rates proved brief as the currency fell sharply as longs were quickly unwound, with EUR/USD hitting a low around 1.4478. The sell off occurred despite the fact that the ECB delivered on expectations that it would flag a July rate hike, with the insertion of “strong vigilance” in the press statement.
The reaction was a classic ‘buy on rumour, sell on fact’ outcome and highlights just how long EUR the market was ahead of the ECB meeting. Interes
* Euro hits threeweek high vs USD after stops triggered
* Commodity currencies biggest gainers as risk aversion eases
* Market focus to turn to global economic data
SYDNEY/SINGAPORE, June 30 The euro rose to a threeweek peak against the dollar on Thursday, swept higher by a wave of stoploss buying and extending a rally after Greece moved a step closer to securing international aid.
The move came after Greek lawmakers voted by a clear margin for a fiveyear austerity plan. The solid margin suggested the government should be able to push through a second package of laws on Thursday, implementing specific budget measures and asset sales.
NEW YORK, May 6 (Reuters) – The euro on Friday posted its biggest weekly loss against the dollar since January and further losses were seen as likely, as sovereign debt concerns reappeared after a German news report, later denied, suggested Greece had raised the possibility of leaving the euro zone.
Spiegel Online reported euro zone finance ministers were meeting in Luxembourg on Friday to discuss Greece, including the issue of its possible exit from the currency bloc. Greece, through its Finance Ministry, later denied it was considering leaving the euro zone. Full post…
Currency strategists at UBS AG believe that the advance of the European currency versus the greenback may be short-lived. The specialists note that there’s a new wave of concerns about euro zone’s debt problems. As a result, they expect euro to lower to $1.25/30 during the next 3-6 months.
UBS analysts are bearish on the pair EUR/USD. According to them, the stronger euro becomes and the more it climbs above $1.40, the bigger is the negative impact on the region’s economic growth. The long-term fair value of the single currency is at $1.20, claims UBS. Even
Since touching a four-year low in June, the Euro has risen a whopping 19% against the Dollar – a veritable surge! One has to wonder, however, if perhaps the Euro hasn’t gotten ahead of itself in its race back upward.
The Euro’s nonstop rise has perplexed me. During the throes of the Eurozone Sovereign debt crisis, it seemed as if the Euro was headed back towards parity, if it even remained in existence! The European Commission’s $500 Billion bailout plan seemed to assuage the markets, but didn’t do much to mitigate against the risk of sovereign default. Besides,