Behind The Euro's Movements

The euro was largely bearish yesterday, after Greece once again failed to come to an agreement with its creditors to restructure its debt. Losses were seen against most of its main currency rivals, including the US dollar, Japanese yen and British pound. Today, in addition to any euro-zone developments that may occur, traders will want to pay attention to a speech from the US Fed Chairman at 15:00 GMT. Any positive statements could help the USD extend its recent bullish trend. Economic News USD - Dollar Remains Bullish to Start off Week The US dollar was able to extend the boost it received late last week during trading yesterday, as negative euro-zone news fueled risk aversion and sent investors to the safe-haven greenback. Greece's inability to reach a debt-swap agreement with its ...

As the debate on international imbalances intensifies, China's monetary policies are coming under direct pressure and could have significant impact on the US bond market, which may be partially behind the USD's decline since yesterday evening. Economic News USD - Differing Monetary Policies in US and Europe Drags on USD The divergence between the monetary policies of Europe and the United States has begun to cause reactionary movements in the foreign exchange market. The US dollar, recently gaining ground on positive fundamentals and rising risk aversion, now appears on the defensive as risk appetite returns. Much of these losses may be attributed to a return of confidence in regards to the euro zone as a few analysts have begun to forecast something resembling an end to the region's ...

European economic confidence dropped in March to 107.3 from the revised 107.9 in February as the renewed debt crisis lowered confidence in the 17-nation using the common currency. Yesterday, S&P downgraded Greece's credit rating by two notches to junk status of BB- from BB+ and said it may lower it again as Greece has to accept loans under emergency European stability plans. Earlier this month, S&P downgraded Portugal's credit rating after the rejection of the deficit-cut plan while Moody's downgraded rating of 30 Spanish banks. European debt crisis is exacerbating despite the approval of the new ESM 500 billion euros mechanism, after confirming on expanding the lending capacity for the current European bailout mechanism to 440 billion euros from 250 billion euros. Industrial ...

German business confidence dropped in March after rising in February to the highest level since record began 20 years ago as the Japanese quake affected stocks and European debt crisis raised concerns. Business climate indicator inched down to 111.1 from 111.2 in February; yet, current assessment gauge rose to 115.8 from 114.7 and expectations gauge fell to 106.5 from 107.9. The devastating earthquake and tsunami that hit Japan along with the unrest in the Middle East lowered demand on risky assets causing DAX index to drop by the most in 10 months last week. On the other hand, by tracking the 17-nation currency movements over the past few months we can see that it surged against the dollar as the pair rose to a high of 1.4248 this month compared with the February's closing of 1.3805. ...

In the euro zone, eyes will be on manufacturing and services data for the month of March with expectations to show a decline after climbing to record high last month. Manufacturing gauge is predicted to fall from the highest level since June 2000 of 59.0 to 58.3 while services are estimated to slide to 56.3 from 56.8. Tracking the euro movements over the past few months we can see that it is showing advance against the dollar as the pair rose to a high of 1.4248 this month compared with the February's closing of 1.3805. In fact, the euro's rise is expected to have negative effect on overseas sales as it will make European goods more expensive, noting that the euro's depreciation was behind the rebound in growth witnessed last year as it boosted exports. European growth for the ...

The US dollar experienced a rapid spike in this morning's trading hours following the opening of Asian equity markets. The spike initially drew concern that an intervention by the Bank of Japan (BOJ), selling their currency against the dollar, had brought about the sudden change in value, but the rapid retracement of the USD's gains made many analysts reconsider this position. Today's news events will help set the market back into order by injecting much-needed liquidity to this morning's thin conditions. Economic News USD - Cause of USD Spike Uncertain; Dollar Still Bearish as Week Begins The US dollar experienced a rapid spike in this morning's trading hours following the opening of Asian equity markets. The spike initially drew concern that an intervention by the Bank of Japan (BOJ), ...

FX Briefing Highlights * US growth slower; retail trade and manufacturing sector weaker * Fed sees growth risks return, puts exit discussion on hold * Money market rates in eurozone climb further, liquidity withdrawal continues US Growth Doubts Weigh on Dollar This week the euro continued its rally against the US dollar and against most commodity and emerging market currencies. The majority of European currencies have managed to hold their ground versus the euro - some (such as the pound Sterling and the Scandinavian currencies) more than others (e.g. the Czech koruna, the Hungarian forint and the Swiss franc). The yen, like the latter, has slipped somewhat against the euro. The euro gained over 3 cents versus the dollar and is currently approaching 1.30. Its sharp rebound ...