Forex Forecast

Auctions Support Euro Spanish and French auctions were taken favorably by the markets and the euro pushed higher in the European session. EURUSD has now rallied 2 and a half big figures since Friday’s S&P downgrades and marginally riskpositive headlines are being taken well by investors.

Data Weakens AUD, NZD Both AUD and NZD fell after a pair of disappointing domestic data releases. Unusually, the euro carried on regardless and further consolidated its recent gains. The possibility of a deal between Greece and private sector bond holders appears to be growing, according to the Financial Times.

Risk Assets Rally The dollar weakened across the board in the European session as risk assets rallied. The German ZEW was strong, with the economic sentiment index printing -21.6 (vs. expectations of -49.4). The current situation index improved to +28.4.

EURJPY In Japan’s Glare The euro experienced a double-dose of upside during the Asia session. First, Japan’s Finance Minister Azumi raised the possibility of intervention in EURJPY, but said he has not yet made a decision on the matter. We see the immediate intervention risk as remote, but investors were in no mood to take […]

FX markets traded on a relatively calm note on Monday morning, despite the ratings action on Friday. News flow was generally thin in the European session as investors assessed the impact of the S&P downgrades.

The euro reacted calmly in Asia to Friday’s wave of downgrades from S&P. EURUSD managed to hold just above Friday’s low and trading was confined to a range between 1.2626 and 1.2661. USDJPY traded 76.81-77.13. S&P stripped France and Austria of their AAA ratings at the New York close, downgrading each by one notch to […]

Euro Rally Fades The euro drifted lower in the European session after investors were slightly disappointed by Friday’s Italian auction. The 3-line auction came in at the top of allocation estimates (the full EUR 3 bn was allotted for the 11/2014 BTP). However, this was a relatively small size auction for Italy at this time […]

Euro Still Climbing The euro’s rebound continued during the Asia session, buoyed by yesterday’s rally across Eurozone sovereign bond markets. EURUSD traded 1.2807-1.2873, USDJPY traded 76.69-76.84. Strong demand at Thursday’s Spanish auction has raised hopes for a positive outcome when Italy tries to sell EUR3-4.75 bn of BTPs today. Our Eurozone rates strategy colleagues expect […]