Posts Tagged: EUR/USD

The European currency started to rally during the previous week despite the bad situation in the European Union. By doing this, the currency has set the stage for volatility and strength for the week to come as well. At the middle of the previous week, the Euro/US Dollar FX Options and Futures Sentiment has reached the most bearish extremes in a long time, which point out to the fact that the trend may be headed higher during the days to come.

The EUR/USD pair is going to be more volatile in the days to come due to the German ZEW economic sentiment data and to the highly-anticipated US Federal Reserve interest rate decision. Nonetheless, unexpected developments may take place at any time due to Greece and to the fact that the debt crisis can become worse at any moment, without previous notice. This means that the Euro fundamentals are pointing towards troubles and towards further declines of Read more »

The US credit rating has been downgraded on Friday by Standard & Poor’s at the AA+ level, descending from the AAA level. This new level means that the country finds itself in the field of somewhere between very strong and extremely strong capacity to meet the financial commitments. In the same day, the US has been removed from the Credit Watch list of Standard & Poor’s, but the outlook continues to remain negative. The reason behind this downgrade have been explained through the conditions in which the debt-rising limit has been raised: “The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

There is no other big credit rating agency, such as Fitch Ratings or Moody’s, which has followed the downgrade emitted by S&P. Moreover, as this is the first downgrade which has Read more »

As the European leaders have finally managed to find a solution for the situation in Greece, it seems that the European currency finally managed to recover and start scoring gains again against its most important counterparts. The European Union leaders met in order to discuss once more the situation of Greece and it seems that they have finally succeeded in finding a solution. They have decided upon increasing the size of the rescue fund and upon accepting a temporary default level set upon Greece as this is the only solution in order to prevent the debt crisis of expanding towards other countries in the region.

The most difficult part of this process has been that of accepting the label “default” for Greece, but the European Union’s leaders have finally agreed upon the fact that a short period in which this label is going to be used for one of the European Union’s countries is better than allowing Read more »

The US Dollar managed to score new gains against most of its major counterparts recently based on the concerns related to the way in which the vote related to the Greek bailout is going to turn out. Also, the same event, correlated with the hope some investors have related to a good solution for this crisis, has managed to lift a little bit the Euro during the overnight trade, causing it thus to recover a little from the losses the currency has faced during the last period.

It is known that the leaders of the European Union have already approved the bailout package in the amount of €78 billion for Greece, but it is now the turn of the Greek Parliament to make a decision concerning the measures which have been imposed by the European Union in order to get the loan. As there are numerous investors on the market who strongly believe that the Greek Parliament Read more »

As the global economic situation become more and more tensed due to the European crisis caused by Greece and to the expiration of the QE2, it is expected for the world’s most liquid currency pair, the EUR/USD to experience a bearish reversal. The same patterns can be seen if we are directing our attention to commodities, equities, treasury and money markets. After a very long period of time, these classes of assets are now faced with trend-defending reversals. The interesting thing is that all these assets are confronted with the same fundamental conclusion which points out to the fact that the capital has shifted from the high-yielding and the high-risk assets towards the safe havens, liquid assets. We can also notice the fact that there is an entire series of fundamentals which are now acting such wise as to threaten the perfect market event from prompting triggers such as elemental change.

On various markets we can now observe Read more »

Despite the very difficult situation the Euro has been in lately, due to the sovereign debt issues, the 17-nation currency managed to finish the week in a good position, gaining back some of the territory lost at the beginning of the week. Even though the situation concerning Greece continues to be of pressure for the European Union, it seems like traders have started to relax upon concerns and to turn back to the Euro. This has also happened due to the fact that there are new hopes for Greece emerged and that this fact actually helped the Euro to erase some of the recent losses.

Even though the beginning of the week has been rather weak for the Euro, based on the fact that there have been contradictory discussions between the European Union’s leaders concerning the measures which they are supposed to take in order to solve the Greek situation, especially as the Greek government seemed to Read more »

The much expected press conference which took place after the European Central Bank’s rate decision has caused a chain reaction on the Forex market, as the decision of maintain the actual interest rates has sparked with the so desired volatility for which the markets were waiting for since a long time. This has caused the EUR/USD pair to decrease by 120-pips. This happened after the overnight session which has brought a consolidation of the European currency and of all the pairs formed with this currency. This was related to the commentary made by President of the European Central Bank, Jean-Claude Trichet, concerning the decision taken by the Bank, that of maintaining the interest rates at 1.25 percent.

Trichet also stated, while talking about the pressure caused by inflation that “inflation rates are likely to stay clearly above 2 percent in the coming months.” He also added that “inflation expectations must remain firmly anchored in line with the Governing Read more »

The report of the ECB meeting has showed that the Europe Central Bank has taken the decision of supporting Greece during this difficult problem. The Greek bonds situation is now to find support from the ECB. This is the latest favorable decision which is to help Greece and thus improve the situation of the sovereign debt in the European Union.

The European Central Bank’s President, Jean-Claude Trichet, has recently announced the fact that the bank considered to take measures in order to encourage investors to purchase bonds which are to replace maturing securities. He also added the fact that the bank does not desire to impose losses on creditors. Afterward, he added the following: “That doesn’t mean that we are against the fact that the private sector, as has been asked a year ago when there was a first program for Greece, financial institutions in Europe were asked to maintain their level of outstanding credit. That is not Read more »

The previous week has brought us news about the reestablishment of the Euro despite the debt problems concerning Greece which have not yet found a solution besides that of imposing a new bond rate to the indebted nation. Despite this situation, the Euro managed to grow against most of its major counterparts. This growth is mainly related to the reports concerning the bad economic situation in the US. As all the macroeconomic results related to the US economy showed poor data, this has caused traders to shift their attention towards the United States, forgetting for a while the difficulties Europe is faced with.

But this is not the only reason, as the news concerning Europe has also managed to support the 17-nations currency. This is related to the fact that the Greek officials have managed to persuade the European Union officials about the fact that they will continue to apply budget cuts in order to have the Read more »

Despite the fact that there are still problems in the European Union, the Euro managed to raise today after the speech addressed by Angela Merkel, Germany’s Chancellor, to the European Union members concerning the need for their commitment to support the European currency.

Angela Merkel announced that Germany is prepared to support the Euro and she declared her opinion concerning which the Euro itself has no problem, but that the problems are related, in fact, to some of the European Union’s members: “We don’t have a euro problem in Europe. We have more of a debt problem. Financial markets doubt whether some EU states can manage their debt in the long-term.”

Jean-Claude Trichet, the President of the European Central Bank declared that the Bank “will continue to deliver price stability” and brought up the subject concerning the necessity of the European Union having more rights in the matter of influencing the monetary policy of its members. This measure Read more »