Forex: Euro Rebound Weighed By Growth Concerns- Pound at Key Juncture

RELATED QUOTES

SymbolPriceChange
GBPUSD=X1.3020+0.0003
USDJPY=X101.4110+0.695
EURUSD=X1.1230+0.0013

Talking Points

  • Euro: Germany Cuts Growth Forecast, ECB Talks Down Exchange Rate Risk
  • British Pound: BoE Warns of Additional Support For U.K. Banks
  • U.S. Dollar: Rebounds Ahead of Fed’s Beige Book

Euro: Germany Cuts Growth Forecast, ECB Talks Down Exchange Rate Risk

The EURUSD tagged an overnight high of 1.3323 as European Central Bank (ECB) board member Ewald Nowotny struck a neutral tone for monetary policy and argued that the euro exchange rate is ‘not a major concern,’ but we’re seeing the single currency struggle to hold its ground as the fundamental outlook for Europe’s largest economy deteriorates.

At the same time, Governing Council member Peter Praet said ‘maintaining price stability is the main task of the ECB’ as the governments operating under the fixed-exchange rate system become increasingly reliant on monetary support, and went onto say that the unprecedented efforts taking by the central bank ‘must be complemented by measures and reforms at the national level and of European governance’ as the debt crisis continues to drag on the real economy.

Indeed, Germany’s Economy Ministry now expects the economy to expand 0.4% in 2013 versus an initial projection for a 1.0% rise, and the ECB may continue to push back its forecast of seeing the euro-area return to growth amid record-high unemployment along with the ongoing slack in private sector activity.

Although we’re seeing the EURUSD maintain the upward trend from back in July, the bearish divergence in the relative strength index continues to dampen the prospects of seeing a further advance in the exchange rate, and the pullback from 1.3403 may expose the 38.2% Fibonacci retracement from the 2009 high to the 2010 low around 1.3120 as the weakening outlook for growth and inflation raises the scope for an ECB rate cut.

British Pound: BoE Warns of Additional Support For U.K. Banks

The British Pound slipped to a fresh monthly low of 1.5975 as the Bank of England (BoE) warned two major banks in the U.K. may require billions in fresh capital, and we may see the sterling struggle to maintain the bullish trend carried over from the previous year should the GBPUSD close below the 1.6000 figure.

As the fundamental outlook remains clouded with high uncertainty, market participants continue to see scope for more quantitative easing in the U.K., but the central bank appears to be slowly moving away from its easing cycle as inflation is expected to hold above the 2% target over the policy horizon.

Beyond the vote count, the BoE Minutes due out on January 23 may show a more hawkish central bank amid the stickiness in price growth, and we may see the Monetary Policy Committee talk down speculation for more easing as the Funding for Lending Scheme continues to work its way through the real economy.

Indeed, we will scale back our bullish bias for the GBPUSD if the pair fails to put in a close above 1.6000, but the pound-dollar could still be carving out a higher low ahead of the policy statement should we see the pair trade back within the upward trending channel dating back to June.

U.S. Dollar: Rebounds Ahead of Fed’s Beige Book

The greenback is regaining its footing going into the North American trade, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) bouncing back from a low of 10,046, and the reserve currency may track higher over the next 24-hours of trading should the Federal Reserve strike an improved outlook for the world’s largest economy.

The Beige Book may prop up the dollar as the central bank continues to highlight the resilience in private consumption along with the budding recovery in the housing market, and the fresh batch of central bank rhetoric may heighten the bullish sentiment surrounding the reserve currency as a growing number of Fed officials drop their dovish tone for monetary policy.

FX Upcoming

Currency

GMT

EDT

Release

Expected

Prior

USD

14:00

9:00

Total Net TIC Flows (NOV)

-$56.7B

USD

14:00

9:00

Net Long-term TIC Flows (NOV)

$1.3B

USD

14:15

9:15

Industrial Production (DEC)

0.3%

1.1%

USD

14:15

9:15

Capacity Utilization (DEC)

78.5%

78.4%

USD

14:15

9:15

Manufacturing Production (SIC) (DEC)

0.6%

1.1%

USD

15:00

10:00

NAHB Housing Market Index (JAN)

48

47

USD

15:00

10:00

Fed's Narayana Kocherlakota Speaks on Monetary Policy

USD

15:30

10:30

DOE U.S. Crude Oil Inventories (JAN 11)

1314K

USD

15:30

10:30

DOE U.S. Distillate Inventory (JAN 11)

6777K

USD

15:30

10:30

DOE U.S. Gasoline Inventories (JAN 11)

7412K

EUR

17:00

12:00

ECB's Jorg Asmussen Speaks on Euro Economy

USD

19:00

14:00

Fed's Beige Book Economic Report

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Devil's in the details of OPEC deal as Asia buyers remain cautious
    Devil's in the details of OPEC deal as Asia buyers remain cautious Reuters - 5 minutes ago

    SINGAPORE/SEOUL (Reuters) - Asian crude oil buyers remained cautious, eyeing details of an OPEC deal after the oil-producers group agreed for the first time since 2008 to reduce output in an oversupplied market. Global oil prices held onto gains … More »

  • Trump's old military prep school looks overseas for renewal
    Trump's old military prep school looks overseas for renewal Associated Press - 9 minutes ago

    While Donald Trump talks tough about dealing with China, his old military prep school is building bridges to that country. The New York Military Academy began classes this fall with new Chinese backing ... … More »

  • Oil prices retreat as investors wait for clarity on OPEC deal Reuters - 18 minutes ago

    Oil futures retreated on Thursday as the market grew more sceptical on how OPEC would implement a plan to curb oil output a day after the group agreed to limit production. Benchmark prices had initially extended gains made in the previous session … More »

  • Energy-linked currencies lifted in Asia after OPEC deal AFP - 18 minutes ago

    Energy-linked currencies led a rally in high-yielding units Thursday after OPEC's surprise deal to cut oil output sent crude prices soaring. Officials at the Organisation of Petroleum Exporting Countries, ... … More »

  • ICICI Pru Life shares fall on debut after $911 million IPO Reuters - 22 minutes ago

    MUMBAI (Reuters) - Shares in ICICI Prudential Life Insurance Co Ltd (ICIR.NS) fell as much as 1.8 percent in early trade on their market debut on Thursday after the company's $911 million initial public ... … More »

  • Hong Kong Stocks Rise for Third Day as Oil Boosts Energy Shares Bloomberg - 26 minutes ago

    The Hang Seng Index climbed 0.5 percent at the midday-trading break, extending a quarterly rally. Cnooc Ltd. and China Petroleum & Chemical Corp. advanced at least 5 percent, while China Oilfield Services Ltd. jumped the most since October, after … More »

  • Key dates since Russian intervention in Syria
    Key dates since Russian intervention in Syria AFP News - 28 minutes ago

    Russia one year ago carried out its first air strikes in support of Syrian President Bashar al-Assad's forces, in a major turning point in a multi-sided civil war. A timeline: Start of Russian intervention - September 30, 2015: Russia, at the … More »

  • Should You Still Invest In Bonds After The Recent Defaults In The Market? DollarsAndSense.sg - 31 minutes ago

    Is the 2008 global financial crisis happening again? The post Should You Still Invest In Bonds After The Recent Defaults In The Market? appeared first on DollarsAndSense.sg. … More »

  • Gold steady as dollar sags after OPEC deal
    Gold steady as dollar sags after OPEC deal Reuters - 33 minutes ago

    Division between Federal Reserve policymakers on when to raise U.S. interest rates has sapped investor enthusiasm for trading on comments by officials from the central bank. The mixed views from U.S. Fed officials have weakened their credibility … More »

  • In Bali's deaf village, silence is golden
    In Bali's deaf village, silence is golden AFP News - 33 minutes ago

    It appears to be just another show on the Indonesian resort island, known for its ancient culture and rituals, but there is a key difference -- the dancers are all deaf and cannot hear the beat. The village of Bengkala has been home to an unusually … More »

  • China property tycoon warns on real estate bubble
    China property tycoon warns on real estate bubble AFP News - 52 minutes ago

    China's richest man, real estate magnate Wang Jianlin, has warned the country's property market is the "biggest bubble in history" -- the latest alarm bell to be sounded on the faltering giant economy. Wang, the owner of real estate and … More »

  • Relief arrives for U.S. shale firms as OPEC folds in price battle Reuters - 54 minutes ago

    It was a moment U.S. shale oil producers have been waiting on for more than two years: OPEC nations finally agreed to cut production on Wednesday in a move that lifted low prices ravaging their budgets. The agreement effectively establishes a floor … More »

  • Energy firms lead Asia market rally on OPEC deal
    Energy firms lead Asia market rally on OPEC deal AFP News - 55 minutes ago

    Energy firms led a rally in Asian stock markets Thursday, while high-yielding currencies advanced after OPEC's shock agreement to cut oil output sent crude prices soaring. The gains come after OPEC's "historic" announcement late Wednesday of a deal … More »

  • Spotify Brings Online Music Service to $3 Billion Japan Market Bloomberg - 58 minutes ago

    Spotify, the world’s largest music-subscription business, will offer a free, ad-supported service as well as an ad-free version for 980 yen ($9.70) per month, the company said at a press conference in Tokyo. Chief Executive Officer Daniel Ek, who … More »

  • Tokyo shares up by break as energy firms surge AFP - 59 minutes ago

    Energy firms soared in Tokyo Thursday, leading a Japanese stock market rally as oil prices were boosted by a surprise OPEC deal to cut crude production. The Organization of Petroleum Exporting Countries, ... … More »

  • A year of bombing in Syria stirs little debate in Russia
    A year of bombing in Syria stirs little debate in Russia AFP News - 1 hour 1 minute ago

    Veteran Russian opposition activist Sergei Davidis was among 300 people who showed up to a protest in Moscow against the start of the Kremlin's Syria bombing campaign. "As far as I know there haven't been any other events dedicated specifically to … More »

  • SE Asia Stocks-Up on oil price rally; Singapore hits near 3-wk high Reuters - 1 hour 19 minutes ago

    By Suhail Hassan Bhat Sept 29 (Reuters) - Southeast Asian stock markets rose on Thursday, in line with broader Asian shares, led by energy counters across the region as a rally in global oil prices after ... … More »

  • OPEC agrees modest oil output curbs in first deal since 2008 Reuters - 1 hour 19 minutes ago

    OPEC agreed on Wednesday modest oil output cuts in the first such deal since 2008, with the group's leader Saudi Arabia softening its stance on arch-rival Iran amid mounting pressure from low oil prices. "OPEC made an exceptional decision today ... … More »

  • Malaysia's closing tin prices for Sept 29 Reuters - 1 hour 20 minutes ago

    KUALA LUMPUR, Sept 29 (Reuters) - Following is a table of Kuala Lumpur tin market prices provided by a Malaysian trader. (Prices in $/tonne, and volumes in tonnes unless stated) Date KL Premium/ Spot Bid ... … More »

  • Energy shares lead Asian stocks higher on OPEC output deal
    Energy shares lead Asian stocks higher on OPEC output deal Associated Press - 1 hour 48 minutes ago

    Energy companies led a rally in Asian stock markets Thursday as investors welcomed news that OPEC nations planned to cut oil production for the first time in eight years in an effort to reduce a global ... … More »

  • Deutsche Bank Said to Face Hurdle Moving Huaxia Money From China Bloomberg - 1 hour 55 minutes ago

    The State Administration of Foreign Exchange is reviewing applications to move large amounts of money on a case-by-case basis and its focus is on preserving currency stability, people with knowledge of the matter said. One option the regulator has … More »

  • China Bubble Trouble Risks Missing Lessons from Japan Crash (1) Bloomberg - 1 hour 58 minutes ago

    While the two scenarios aren’t a carbon copy, similarities between China’s record credit boom in recent years and Japan’s bubble era have been made at various times by a number of economists and investors. Now, those voices are being heard more … More »

  • Carmaker expects to break even in 3 years Business Times - 2 hours 1 minute ago

    SHAH ALAM: Proton Holdings Bhd expects to break even in three years by selling 5,000 units of its all-new Proton Saga a month. If we can sell 5,000 units a month, we can break even in three years,” said chief executive officer Datuk Ahmad Fuaad … More »

  • DRB-HICOM looking at 5 proposals for Proton partnership Business Times - 2 hours 1 minute ago

    SHAH ALAM: DRB-HICOM Bhd has short-listed five global carmakers to be its subsidiary Proton Holdings Bhd’s strategic partner. Group managing director Datuk Seri Syed Faisal Albar said the strategic partner would also own a stake in the national … More »

  • Petronas to review Canada project Business Times - 2 hours 1 minute ago

    KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) will review a proposed C$36 billion (RM112.4 billion) liquefied natural gas (LNG) plant in Canada that was approved by Ottawa after a three-year wait. Canadian Prime Minister Justin Trudeau’s … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.155+0.004+2.65%
    N21.SI
    0.113+0.004+3.67%
    40E.SI
    0.295+0.020+7.27%
    5ME.SI
    0.127+0.005+4.10%
    A50.SI
    0.1050.0000.00%
    40F.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.35+0.05+16.67%
    AYV.SI
    0.119+0.015+14.42%
    A7S.SI
    0.33+0.04+12.63%
    BJE.SI
    0.27+0.03+12.50%
    AWI.SI
    0.255+0.025+10.87%
    BJD.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.09-0.01-14.29%
    42D.SI
    0.25-0.03-10.71%
    F86.SI
    0.15-0.02-10.18%
    5WJ.SI
    0.41+0.02+5.13%
    BTG.SI
    0.525-0.035-6.25%
    AWZ.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.3623+0.0034+0.25%
    USDSGD=X
    1.5298+0.0059+0.39%
    EURSGD=X
    1.7734+0.0051+0.29%
    GBPSGD=X
    74.4340+0.322+0.43%
    SGDJPY=X
    5.6902-0.0139-0.24%
    SGDHKD=X
    3.0223-0.0093-0.31%
    SGDMYR=X
    9,516.6475-44.9551-0.47%
    SGDIDR=X
    4.8963-0.0139-0.28%
    SGDCNY=X
    1.0469+0.0023+0.22%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,328.40+4.70+0.36%
    GCZ16.CMX
    19.32+0.19+1.01%
    SIZ16.CMX
    95.67+2.69+2.89%
    ^XAU
    2.20+0.02+0.73%
    HGZ16.CMX
    43.85+0.41+0.94%
    CLV16.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.13+0.02
    ^FVX
    1.57+0.01
    ^TNX
    2.29+0.01
    ^TYX