EUR/USD: The Fate of the Euro Is Decided in Ukraine
Macro statistics were mixed last week. But few people pay attention to it at the moment. The dynamics of European currencies is determined by what is happening in Ukraine for the second week now. The escalation of the Russian-Ukrainian armed conflict is intensifying, increasing the demand for risk-free assets. And it is the dollar that acts as such, not the pan-European currency.
EUR/USD: War Is Not Only Blood, But Also Business
The dynamics of European currencies is now determined by what is happening in Ukraine. You can forget about all kinds of macro-economic indicators for a while. Who and how much earned on Russia's invasion of a neighboring country, and who lost and how much, will become clear only when the situation stabilizes finally. And this may not happen soon.
EUR/USD: Waiting for War and Rate Hike
The period from February 10 to 14 was unexpectedly stormy. Panic moods were diligently warmed up by the leading media, actively discussing the statements of world leaders, primarily the President of the United States, regarding a possible Russian invasion of Ukraine. The White House even decided to relocate its diplomatic mission from Kiev, the capital of Ukraine, to Lviv, away from the zone of possible military operations and closer to the EU borders.
EUR/USD: Tsunami Due to US Inflation
Ancient Greeks began to declare a truce during the Olympic Games more than 2,800 years ago. It seems that the EUR/USD bulls and bears have decided to adopt this tradition during the current Winter Olympics in Beijing. We observed a complete lull for at least the first half of the week, and the pair moved eastward under slight pressure in a narrow channel not exceeding 60 points, 1.1400-1.1460.
EUR/USD: Another Surprise, from the ECB This Time
It's hard to resist when you're attacked from both sides. The dollar received two powerful blows last week: one from the Bank of England, the second from the ECB, and could not resist them. The USD DXY index flew down. While it was at the level of 97.36 on January 28, it dropped to 95.14 on February 04. This is not a knockout of course, but a knockdown from which it will be difficult for the US currency to recover quickly.
EUR/USD: Surprises from the US Federal Reserve
The meeting of the US Federal Reserve FOMC (Federal Open Market Committee) and the subsequent press conference of its management was certainly the main event of the last week. JP Morgan analysts called the speech of Jerome Powell, the head of the US central bank, the most “hawkish” of all during his tenure.
EUR/USD: FOMC Meeting: the Day the Markets Are Waiting For
The main event not only of the next week, but of the whole month will certainly be the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve on January 26. Will the regulator raise interest rates now? Or in March? Or will it postpone the curtailment of incentives indefinitely? These questions remain unanswered.
EUR/USD: Rumors That Drive the Markets
The weather on the market is quite often determined by rumors which have very little to do with reality. Or nothing at all. But those who spread them can earn good money by speculating on them. Something similar seems to have happened last week.
EUR/USD: Awaiting the January FOMC Meeting
The EUR/USD pair has been in a sideways trend for seven weeks in a row, moving along the horizon 1.1300 in the 1.1220-1.1385 channel. Even the publication of the protocols could not get it out of this state of the December FOMC (Federal Open Market Committee) meeting of the US Federal Reserve, which confirmed the seriousness of this central bank's intentions to tighten monetary policy and strengthen dollars. Apparently, the regulator is frightened by the rate of inflation in the country. In addition, it did not expect the Omicron coronavirus strain to have a significant negative impact on economic activity in the United States.
We talked a week ago about what experts from the world's leading banks and agencies think about the behavior of the EUR/USD pair in the coming 2022. And the fact that we paid attention to it in the first place is quite logical: after all, this pair is the most traded on the Forex market, and the European currency itself leads by a huge margin in the formation of the US Dollar Index DXY, with 57.6%.
It is always interesting to know whose predictions came true and whose predictions did not. Exactly a year ago, we published forecasts given by experts from leading world banks regarding the EUR/USD rate for 2021, and now we can decide which of them was right and to what extent. Or, on the contrary, which one was wrong.
EUR/USD: Old News from the Fed And the ECB
The past week was the week of the Central Banks. The US Federal Reserve met on Wednesday, December 15, for the last time this year, the ECB and the Bank of England on December 16, and the Bank of Japan at the end of the working week, on Friday, December 17.
EUR/USD: Ahead of the Fed and ECB Meetings
We titled this section of the review “Employment and Inflation Decide Everything” last week. It is these two parameters that determine the monetary policy of central banks in the current situation. The next meeting of the US Federal Reserve will take place on Thursday, December 16, and the markets expect the regulator to speed up the procedure for curtailing incentives, and, perhaps, even increase the interest rate. Undoubtedly, these decisions will be influenced by the macro statistics released in recent days.
EUR/USD: Employment and Inflation Decide Everything
Markets are now ruled by two factors: fear of the new COVID strain and monetary tightening by central banks. It is not yet very clear how dangerous the Omicron strain is and how it will affect the economy. Therefore, the main focus is shifting towards central banks and, first of all, the US Federal Reserve. Thus, 19 Reuters experts have named the difference in interest rates as the main market driver, while 15 have pointed to Omicron.
EUR/USD: Panic Named B.1.1.159
The past week can be divided into two parts: before and after Thanksgiving. Let us remind you that the day Thursday, November 25 was a day off in the United States. And since the lion's share of capital is controlled by banks and funds located in this country, the lull comes in financial markets around the world on this day.
EUR/USD: Closer to Parity
We made a short equation in the title of the previous review on the EUR/USD pair: “Inflation growth = USD growth”, and last week's events confirmed its fairness. Strong data on retail sales in the US, released on Tuesday, November 16, allowed the dollar to rally again, and the USD DXY index to return to the values of one and a half years ago and renew the highs of 2021. With the forecast of 1.4%, retail sales in October increased by 1.7% (the growth was twice less in September, 0.8%). The retail control group indicator went up as well, showing an increase in October by 1.6% (forecast 0.9%, growth a month earlier - 0.5%). Recall that this indicator represents the volume of retail trade in the entire industry and is used to calculate the chain price index for most goods.
EUR/USD: Rising Inflation Equals to Rising USD
All US macroeconomic statistics turned out to be worse than forecast. But despite this, the American currency continues to grow. The DXY dollar index, which measures it against a basket of six other major currencies, hit 95.26 on Friday, November 12, gaining about 2% over the past two weeks. It would seem that everything should be the other way around. So, what is the reason for this strange situation? It turned out to be the rapid growth of inflation.
EUR/USD: Focus on the US Labor Market
The central events last week were the meetings of two regulators, the US Federal Reserve and the Bank of England. Traders were also certainly interested in data from the US labor market, including such an important indicator as the NFP, the number of jobs created outside the US agricultural sector.
EUR/USD: After ECB Meeting, Ahead of Fed Meeting
Last time the EUR/USD review was titled “In a state of uncertainty”, as confirmed by the previous week. Starting at 1.1643, the pair dipped to 1.1581, then rose to 1.1691, and ended the session with a new drop, this time to the 1.1560 level.
EUR/USD: In a State of Uncertainty
When giving their forecast a week ago, 20% of analysts were in favour of a decline in EUR/USD, 50% voted for it to rise, and 30% were neutral. As a result, 80% of those who pointed north and east were right. After starting at 1.1600, the pair first rose to 1.1668, then fell to 1.1616, and then moved sideways in this channel. After Friday's speech by the Fed Governor, the pair dropped to the bottom of this trading range but finished almost in its middle at 1.1643.
EUR/USD: Correction or Trend Change?
Having reached a local low of 1.1523 on Tuesday October 12, EUR/USD ended a five-week downward marathon, turned, and moved up. Since autumn started, the dollar has won back 385 points from the euro. And is the pan-European currency going to regain losses now?
EUR/USD: First Down, Then Up
The global economy is recovering from the effects of the COVID-19 pandemic, and this process will continue in 2022. At least. The forecast for global GDP growth of 6% is maintained this year. Growth will continue (unless there are new “surprises”) to roughly 5% next year, according to preliminary forecasts. However, this is an average indicator, and it is the difference in the rates of recovery of the economies of different countries that will affect the rates of their national currencies.
EUR/USD: Bears' New Win
EUR/USD fell to 1.1562 last week, breaking through the key support level of 1.1630, which separated the bullish trend that began in March 2020 from the bearish trend.
EUR/USD: Close Start of QE End
The Fed did not make any changes to its monetary policy at its meeting on September 21-22. However, the regulator made it clear in its commentary that it was possibly ready to start a gentle tapering of the monetary stimulus (QE) program as early as November.
EUR/USD: Awaiting US Fed Decision
The dollar continues to strengthen, and the EUR/USD pair moves south. Starting on Monday September 13 at 1.1810, it ends the five-day run at 1.1730. The movement is certainly not very strong, only 80 points. But it must be taken into account that it was 1.1908 two weeks ago, on September 03.
EUR/USD: Eurozone QE Recalibration
The ECB meeting on Thursday 09 September went off as expected with no surprises. The interest rate remained unchanged at 0%. The European regulator has proposed a “dovish” reduction in the monetary stimulus program (QE). More precisely, according to Christine Lagarde, the bank's governor, it is not even about “tapering” but “recalibrating” the program. And the decline in asset purchases in Q4 is just a reversal of the decision made in March to increase them. In doing so, the ECB remains flexible, and may change the pace of purchases early next year if necessary.
EUR/USD: Falling Dollar and Rising Risk Appetite
The majority is not always right. Thus, only 30% of the experts voted for EUR/USD to grow to 1.1900 last week. But they were the ones who proved right. After the release of data from the US labour market on Friday 03 September, the pair soared to a height of 1.1908, and finished five days at 1.1880. The weakening of the US currency continues after Fed chief Jerome Powell's dovish statements in Jackson Hole and amid uncertainty with the timing of the beginning to wind down the fiscal stimulation program (QE).
EUR/USD: Three Hawks and a Dove in Jackson Hole
The return of the EUR/USD pair to 1.1700-1.1900 was predicted by 35% of experts supported by 25% of oscillators that showed it was oversold. After renewing the annual low of 1.1665 on August 20, the pair did go into a correction, reaching 1.1775 on Thursday.
EUR/USD: Fed Needs Strong Dollar, ECB Needs Weak Euro
A previous review named the publication of the US Fed's FOMC meeting minutes on Wednesday 18 August as the most important event of the past week. This document was supposed to clarify the situation regarding the timing of the curtailment of the monetary stimulus (QE) program. Of course, 100% clarity never came out. Some Fed executives still believe that it is necessary to start winding down stimulus at the earliest in spring 2022. However, there is also the opposite view that a parting with QE should happen before the end of this year. And it was this view that led to another decline in investor risk appetites and a further strengthening of the dollar.
EUR / USD: Focus on Inflation
The forecast given last week has come true 100%. Recall that 70% of experts suggested that EUR/USD will test the late March low at 1.1700 once again. And it did drop to the level of 1.1705 as early as Wednesday. However, the drivers for further strengthening the US currency were not enough, and the pair was moving in reverse, north, for the second half of the week.
