Forex Forecast

ECB To The Rescue? Yesterday, it was Nowotny and today it was ECB President Draghi who triggered a short squeeze which vaulted EURUSD beyond the 1.23 level before the rally cooled.

Draghi Lifts Euro The euro staged another relief rally after some bold comments from ECB President Draghi. Reuters reports Draghi as saying the ECB will do anything within the mandate to preserve the euro.

RBNZ Unchanged The RBNZ kept the OCR unchanged at 2.5% as widely expected, and also made no change to its essentially neutral policy stance. Accordingly our New Zealand economist sticks to his view that the policy rate will remain on hold until the March 2013 policy decision (when the first 25 bp hike is likely […]

Euro Relief After spiking higher on the back of a short squeeze triggered by comments from the ECB’s Nowotny that “there are pro arguments” in favour of granting the ESM a banking license, EURUSD has stalled out in the absence of any fresh drivers.

Deeper Double-Dip in UK GBP came under pressure on Wednesday with cable dropping 75 pips after UK Q2 GDP fell by 0.7% q/q and 0.8% y/y, much weaker than consensus estimates.

RBA To Hold In August Potential policy trajectories are back in the forefront of investor attention as officials seek to ensure the recent weakness in economic conditions does not deteriorate into something more pernicious.

Euro Hangover The euro hangover continued in the wake of the German ratings outlook downgrade by Moody’s, which put European bond markets on the defensive – in the periphery and core.

To The Core European fixed income markets remained under pressure on Tuesday, but the sell off was no longer confined to the periphery, in light of Moody’s outlook downgrade of Germany last night.

Eurozone Core Under Scrutiny The euro opened Tuesday trading on a very weak footing as Moody’s revised ratings outlooks for Germany, Holland and Luxembourg late during the US session to negative.

Euro Fear The euro continues to look vulnerable, with EURUSD having tested sub-1.21 levels in the face of a further jump in peripheral bond yields amid a slew of worrisome headlines since the weekend.

Spanish Bonds Drive Markets Euro weakness continued on Monday with Spanish yields rising further across the curve. 10y yields rose around 20bp, putting further downward pressure on the euro.