Forex Forecast

Euro Firms Post-G20 The Euro made an early dash towards 1.35 despite a lack of commitment by the G20 on strengthening the firewall around the Eurozone. Nonetheless, most global policymakers appeared reassured that the situation in the Eurozone has stabilised and some degree of confidence has returned.

G20 Procrastinates The weekend G20 meeting broke up without any specific decision on how – or even whether – to boost IMF resources with the intention of having extra firepower on standby if Europe needs it. Officials said they would revisit the issue at the next meeting in April, but would first need to see […]

EURUSD Through 1.34 The recent dollar weakness continued versus risk currencies in Europe. In the absence of major news stories or data releases the stable risk environment remained, with the euro breaking through 1.34 and AUD recovering some of its earlier losses following a Fitch downgraded the ratings of three Australian banks. Earlier,

Bank Downgrades Knock AUD The Australian dollar fell towards the end of the Asia session after Fitch downgraded the ratings of three Australian banks. Earlier, AUD got a modest boost from parliamentary testimony by RBA Governor Stevens who painted a relatively upbeat picture of the economic outlook.

Stevens Boosts AUD The Australian dollar got a modest boost from parliamentary testimony by RBA Governor Stevens. He painted a relatively upbeat picture of the economy and, crucially, he did not suggest the RBA are poised to cut the cash rate imminently.

Strong IFO Boosts Euro The euro led other risk assets higher in the European session after a strong German IFO print. All sub-indices including the main business climate (109.6) were above consensus and the euro broke through the 100 day movingaverage to a high of 1.3343.

German IFO Eyed The Asian session was relatively quiet once again and we saw further market consolidation. Overnight BoJ Governor Shirakawa said that the latest easing measures were supposed to boost sentiment temporarily and a rise in prices won’t change policy.

Seeking Consolidation With the news flow from the Eurozone largely exhausted for now the market reverted to data in search of risk drivers.

BoE Split On QE Risk assets continued to trade heavy in Europe and the euro came under slight pressure after some weaker Eurozone PMIs. USDJPY finally broke through 80 and pushed higher throughout the session.

PMIs Due The relatively benign risk environment continued overnight with the dollar better bid in the Asian session. USDJPY finally broke through 80 while the Nordic currencies outperformed again. The February China HSBC flash PMI improved to 49.7 although export orders were fairly soft at 47.4.

Risk Rallies, Selectively The reception to Greece’s bailout deal was mixed on Tuesday. The euro was steady though did not break new ground as it was clear the fixed income market needs to brace for a Greece credit event.