Archive for Euro to Dollar News

Euro to Dollar Analysis 8 July 2010

Thursday, July 8th, 2010
euro to dollar

Euro to Dollar Chart July 2010

The euro to dollar is trading at an interesting price level having recovered from the lows of last month where we saw the pair touch USD1.1876 and end the month as a long leg doji candle.  As such this reversal signal has duly been validated by early trading so far in July with the pair currently moving back above USD1.25 to trade at USD1.2651 at time of writing.  The question, of course, is whether this is merely a short squeeze higher or a longer term change in sentiment for the euro to dollar.

The general consensus amongst market professionals and analysts is that the euro is precariously balanced between recovery and destruction but in the main this is simply seen as a short term bounce higher before the longer term downwards trend continues in the pair, and indeed some analysts are even predicting a move to parity as early as next year.  This move to parity is fact seen as positive for the eurozone and possibly factor in helping to generate some growth and thereby stimulate the eurozone economy as a result.

Much of the blame for the recent long term decline in the euro has been due to the carry trade with low interest rates in Europe helping to establish the euro as one of the favoured currencies for this trading strategy.  For longer term trend traders this presents an excellent opportunity for the 6 to 9 months whilst for shorter term or intra day traders the bounce higher simply provides excellent opportunities to enter short positions in readiness for the downwards move.

You can find a daily chart analysis for the eurodollar at my euro vs dollar site.

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Euro ToDollar 1 Feb 2010

Monday, February 1st, 2010

Euro to dollar fundamental news is dominated this week by the ECB rate decision and Friday’s non farm payroll.  Before either of these momentous events the markets will have to plough their way through a veritable raft of releases which began earlier this morning with the final manufacturing PMI data for Europe which came in ahead of expectation at 52.4 against a forecast of 52 which as a result helped to give the euro a small lift in currency trading this morning.  The euro to dollar is now waiting for the US session in which the key release is the ISM manufacturing figure which is forecast to show a modest improvement over last month’s figure at 55.5 against a previous of 54.9.  The ISM is a diffusion index and is based on a survey of purchasing managers in manufacturing industries with a figure of above 50 indicative of an expanding market.  This number is generally considered to be leading indicator and should the actual be better than forecast then this should be good news for the euro to dollar.

Tuesday’s fundamental news for the euro to dollar pair starts early with the release of German retail sales (Europe’s largest economy) which is forecast to show a healthy improvement over last month’s poor -1.7% to an improving 0.9%.  Should the number come in better than forecast then this should help to lift the euro in the London trading session.  Later in the morning we have the PPI data but this tends to have a relatively muted effect on the market since Germany and France release their own figures.  The forecast for this is a flat 0%, virtually unchanged since the last time at 0.1%.  Tuesday’s afternoon session for the euro to dollar will see the pending home sales in the US which measure the number of homes sold, but awaiting completion.  The number forecast is significantly better than previous at 0% with last month’s figures a dreary -16%, once again adding the good news pipeline for the US dollar.   This figure is, once again, considered to be a leading indicator and there can have a significant impact on the euro to dollar pair, with a better number having a positive effect on the US currency.

Wednesday’s fundamental news in Europe is relatively minor with final services PMI data due up first followed by retail sales later in the morning with the latter forecast to show an improvement from the last time, up from -1.2% to +0.4%.  This will, now doubt add further to the good news stories on both sides of the Atlantic adding to the tussle  between the euro and the US dollar.   Attention in the afternoon then switches to the US and concentrates on 2 key releases:  the first of which is the ADP non farm numbers followed by the ISM non manufacturing PMI.  The first of these generally provides an excellent guide to the non farm payroll numbers due for release 2 days later as they are based on actual payroll changes therefore being a good predictor of Friday’s number.  The forecast is for an improving picture with a figure of -36k against a previous of -84k.  Any improvement is likely to prove positive for the US.  Two hours later we have the second “red flag” number, with the ISM data also forecast to show an improvement from 49.8 to 51.2 this time crossing the 50 threshold which indicates an economy in expansion.  Once again if the actual is better than forecast the dollar could strengthen further as a result.  Final data for Wednesday is the weekly release of crude oil inventories which represents the change in the number of barrels of crude oil held in inventory at Cushing.

Thursday sees the ECB rate decision followed 45 minutes later by the press conference and, as usual, it will be the statement itself followed by a question and answer session which will be the focus for the market rather than the rate itself which are expected to remain unchanged at 1%.  The principal US number is the afternoon is the weekly unemployment claims data forecast at 461k, little changed from last week’s 470k.

Friday is all about non farm payroll and with little in Europe it is this item of fundamental news that will preoccupy all the markets throughout the day.  The forecast is for a positive figure of 13k which was forecast last month but failed to deliver at -85k and if achieved will be the first time in 2 years and we could see a resultant surge in the US dollar.  The unemployment is expected to remain flat at 10%.  Finally the week rounds off with the start of another G7 circus which is due to take place in Canada.

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Eurodollar Currency News 18 Jan 2010

Monday, January 18th, 2010

With the US markets closed today for the Martin Luther King holiday, we will see a muted start to the trading week for fundamental news on the euro to dollar pair.  The only relevant news today is a minor announcement from Italy where the trade balance figures came in marginally worse than expected at -0.79bn against a forecast of -0.73bn and as expected the news had little impact on the euro.   With no other dollar news later in the day expect the euro to dollar to trade in a desultory way for the remainder of the day.

Meanwhile Tuesday sees the currency trading week kick off with the important German ZEW numbers which are forecast at 49.8, marginally lower than previous which came in at 50.4.  The ZEW is generally considered to be a leading indicator and is one of the most important “sentiment” indices and is based on a survey of around 350 German institutional investors who are asked to rate the economic outlook for Germany (Europe’s largest economy) for the next six months.  If the actual is better than forecast then this is generally favourable for the euro.

The US data due for release is issued by the Treasury Department and is the TIC long term purchases which are forecast to come in at 30.3bn, well above last month’s figure of 20.7bn.  The figures represent the difference in value between foreign long term securities purchased by US citizens and those purchased by foreigners and which provides the market with an indication of overseas demand for the US dollar. Once again if the actual is better than forecast then this should be good news for the US dollar.

Wednesday’s highlights for Europe come once again from Germany with the PPI data forecast this time at 0.2%, an increase over last month of 0.1%.  The figure represents the change in the price of goods sold by manufacturers and is generally considered a leading indicator of consumer inflation which in turn will affect interest rates.   The key fundamental news for the US is also the PPI data which is expected at 0.1%, significantly lower than last time at 1.8%.

Whilst Thursday sees a raft of fundamental news for Europe, this is all second tier data and covers flash manufacturing and services for both Germany and France coupled with the ECB monthly bulletin.  Meanwhile in the US we have two tier one releases: the first being the weekly unemployment claims which are forecast at 441k against a previous of 444k and closely followed by the Philly Manufacturing Index forecast at 18.2 against a previous of 20.4.  The latter is another diffusion index based on a survey of 250 manufacturers in the Philadelphia area who are asked to rate the current business climate and if the actual is better than forecast then again this should be favourable for the US dollar.

The end of the week closes with a very quiet day of fundamental news for the euro to dollar, with nothing in the US scheduled for release and only a second tier announcement in Europe for industrial new orders.

Given the somewhat sparse level of fundamental news for the euro to dollar, currency markets will be watching this week’s raft of 4th quarter earnings for clues as to the state of the economic recovery (or otherwise) and and their impact on the market’s appetite for risk.

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Euro to Dollar Currency News 7 Jan 2010

Thursday, January 7th, 2010

The fundamental news which will dominate the euro to dollar pair this week will be the employment figures in the US and the problem with Greece in Europe as it was a combination of both these items of news which helped to shift market sentiment towards the US Dollar last month.  Last month’s non farm payroll figures which came in at -11k against a forecast of -119k came as a complete shock to the market and kick started the new dollar positive trend.   This new sentiment towards the dollar was further reinforced by COT data for week ending 15th December which revealed that  the majority of speculators had shifted from being short dollars to long dollars: in other words registering a net Euro short of 16,448 contracts, a sharp reversal from the net Euro long of 51,045 contracts from 6th October – itself the largest Euro long since 8th Jan 2008.

Meanwhile in Europe Greece was giving the ECB a very bad headache when it became clear that the Greek deficit had broken just about every Eurozone rule and may even yet put the entire Euro project in jeopardy and perhaps coming to realise that monetary union cannot work without political union.   The euro to dollar rate is now desperately trying to hold above USD1.43 with only the 40 week moving average offering any sort of protection.  Whether it will hold after tomorrow’s nfp data remains to be seen.

Euro to Dollar Weekly Chart 7 Jan 2010

Euro to Dollar Weekly Chart 7 Jan 2010

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help you with your forex trading – so good luck and good trading.

Euro To Dollar – Fundamental News This Week

Monday, November 2nd, 2009

A busy week for the euro to dollar with the three main events being the FOMC meeting and rate decision on Wednesday, which is followed on Friday by the Non Farm Payroll data as we are now starting a new month ( how time flies!!) Sandwiched between this of course is the ECB rate decision on Thursday, so a packed week of high profile news. The forex markets, and broader financial markets in general will be watching the statement from the FED on Wednesday VERY closely, following the figures from last week which suggested that the US economy has finally emerged from recession and into growth once again. It is far too early to expect a rate increase of course, but the wording of the statement will be dissected and analysed for any clues that interest rates may now rise sooner rather than later, with any such signal being helpful to the US dollar, which is currently languishing at the bottom of a waterfall on the US dollar index chart. Indeed any comments to this effect could signal the long awaited shift in market sentiment towards the US dollar which is currently occupying the position of the low yielding currency of choice for the carry trade, a place once taken by the Japanese Yen. Should the statement on Wednesday, be confirmed by some good numbers on Friday with the NFP data, then this could signal a revival for the US dollar, and fall in the euro as a result.

Monday’s fundamental news kicks off in Europe with the Final Manufacturing PMI data, a relatively minor news item, followed in the afternoon by a raft of US housing data including Pending Home Sales, Construction Spending, along with two sets of data from the ISM, one for Manufacturing Prices and the other for Manufacturing PMI. Tuesday is an extremely quiet day as the markets wait for Wednesday which also includes the ADP Non Farm Employment numbers which often provide an excellent guide to the more significant NFP figures on Friday, with the former having been compiled from payroll data – a relatively accurate measure of the numbers of people employed and the changes during the month.

Thursday is all about the ECB, and once again not so much the rate decision with the ECB  once again keeping interest rates on hold, but more about the accompanying statement to the decision which is released 45 minutes after the rate announcement, and it is the statement itself which will be closely watched for any clues or signals of changes in policy. Finally we have Friday and a crowing end to a busy week with the NFP data, which may well set the tone for the US dollar over the next few months, particularly if it provides a confirmatory message to the statement on Wednesday – so a decisive week for the euro vs dollar of fundamental news on the economic calendar.

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Daily Currency News : Euro to Dollar 1 Oct 2009

Thursday, October 1st, 2009

Although we have a raft of fundamental items on the economic calendar for the euro to dollar in today’s daily currency news the vast majority relate to the US with only 3 medium tier releases for Europe.  The first of these was German Retail sales which came in worse than expected at -1.5% against a forecast of 0.0%; Final Manufacturing PMI too came in worse than expected at 49.5 versus a forecast of 50.2 & finally the unemployment rate which did manage to come in on target at 9.6%.  All three items painting a picture that economic recovery in Europe is still in a fragile state.

The markets then turn to the US where we have no less than 10 items of data & two speeches.  In no particular order of importance these kick off with the year on year Challenger job cuts which measures the change in the number of job cuts announced by employers and the forecast is for -13.8 against a previous of -5.7 and gives an indication of the scope and depth of the unemployment problem in the US.  This number is likely to reinforce yesterday’s bad ADP figure which showed the US private sector continuing to cut payrolls.   This release is quickly followed by the Unemployment Claims which measures the number of people who filed for unemployment insurance for the first time during the past week and the forecast here is for 532k and despite being a lagging indicator traders watch this figure as it provides an insight into the overall health of the economy.   Next we have the Core PCE Price Index which is forecast at 0.1%, Personal Spending data forecast at 1.2% and Personal Income data forecast at 0.1%.  At 14.00 GMT Ben Bernanke is due to testify on financial regulation before the House Financial Services Committee.  His testimony comes in two parts: the first is a prepared speech which is made available on the FED’s own website at the start and this is followed by a question and answer session.  It is at this point that we can expect a degree of market volatility.

At 15.00 GMT we have the ISM PMI figures which are expected to come in at 53.9 (anything over 50 is considered expansion) which is released at the same time as the Pending Home Sales which are forecast at 0.9% against a previous of 3.2%.  Finally we have Construction Spending, ISM Manufacturing Prices, Natural Gas Storage and Total Vehicle Sales.  The day rounds off with another speech from FOMC member Dennis Lockhart to the State College School of Business in Macon on the economic outlook and financial conditions.  All in all a day in which the markets will be able to judge the depth (or otherwise) of the economic recovery in the US and whether this recovery is likely to be consumer led given the levels of unemployment.  For currency traders the day could also indicate just how low the dollar is likely to go.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.