EUR/USD: The Dollar Is Gaining Strength Again
The EUR/USD pair moved in a sideways channel of 1.0500-1.0600 for a week and a half. However, it is clear that neither investors nor speculators are interested in such stagnation. But some kind of trigger is needed to break out of it.
EUR/USD: Just a Calm Week
The last week was quite calm for the EUR/USD pair. It moved along the Pivot Point 1.0500, and the maximum range of fluctuations was less than 140 points (1.0468-1.0605), which is quite small for today.
EUR/USD: Fed FOMC Meeting Results
Last week's events were based on Friday, June 10, when US inflation statistics were released, which amounted to 8.6% against the expected 8.3%. Having learned these disturbing data, market participants began to include in dollar quotes the possibility of raising the interest rate by 0.75% instead of the previously predicted 0.5%. Some hotheads even talked about its increase by 1.0% straight away. As a result, the FOMC (Federal Open Market Committee) at its meeting on Wednesday, June 15, raised the key rate to 1.75%, that is, by 0.75%.
EUR/USD: We Are Waiting for the Fed Meeting
The movement of the EUR/USD pair from May 23 to June 09 can be considered as sideways in the range of 1.0640-1.0760 (several false breakdowns in both directions do not count). However, this relative calm ended after the meeting of the Board of the European Central Bank on Thursday June 09. The markets woke up, the pair flew down, and having dropped by more than 200 points by mid-Friday, it froze in anticipation of US inflation data.
EUR/USD: Inflation and Labor Market Decide It All
The total result of the week can be considered close to zero. If the EUR/USD pair completed the previous five-day period at 1.0730, the final chord sounded at 1.0720 this time. At the same time, we cannot say that the past week was very boring: the maximum volatility was 160 points, 1.0786 at the high and 1.0626 at the low.
EUR/USD: Fed's "Boring" FOMC Protocol
The DXY dollar index hit a multi-year high of 105.05 on Friday, May 13, after a six-week rise. The last time it climbed this high was 20 years ago. However, a reversal followed, and it was already at the level of 101.50 exactly two weeks later. Following the general trend, the EUR/USD pair has also been growing since May 13, reaching the height of 1.0764 on May 27. The euro has pushed the dollar by 415 points during this time. And this is not at all the European currency that did it, but the American one. More specifically, the US Federal Reserve.
EUR/USD: Growth of the Pair as a Result of DXY Correction
The DXY dollar index hit a multi-year high of 105.05 on Friday, May 13 after a six-week rise. The last time it climbed this high was 20 years ago. However, a reversal followed, and the DXY was below the 103.00 horizon on May 19-20. According to a number of analysts, such a drop is more likely the result of a technical correction, and not a consequence of changes in fundamental factors. The latter still remain on the side of the American currency. However, there are already some alarming signals here, as the sharp tightening of the Fed's monetary policy increases concerns about the growth of the US economy and increases the likelihood of a recession.
EUR/USD: On the Way to 1.0000
The dollar continues to rise, while the EUR/USD pair continues to fall. The DXY dollar index crept close to 104.9 on Thursday, May 12. The last time it climbed this high was 20 years ago. The pair found the bottom at the level of 1.0349, in the area of the lows of December 2016 - January 2017. A little more, and following DXY, it will get to where it traded 20 years ago. And there, parity 1:1 is just a stone's throw away.
EUR/USD: A week of Many Multi-Year Records
Although some hotheads, such as James Bullard, the head of the Federal Reserve Bank of St. Louis, believed that the interest rate could be raised by 0.75% straight away, everything happened as the market expected. Following the May 4 meeting, the FOMC (Federal Open Market Committee) raised the federal funds rate by 0.5% to 1.0%. This increase was the largest since May 2000, as the US Central Bank has been changing the rate in steps of 0.25% for the last 22 years.
EUR/USD: Euro Updates Five-Year Low, We Are Waiting for the Fed (FOMC) Meeting
The DXY index that measures the US dollar against a basket of six other major currencies updated its 20-year high on Thursday, April 28. The reason for this growth is still the same, and we have repeatedly written about it: the Fed began to tighten its monetary policy earlier than other major central banks. It is expected that the FOMC (Federal Open Market Committee) may raise the key interest rate by 0.5% at the next meeting on May 4. This is the minimum. For example, James Bullard, the head of the Federal Reserve Bank of St. Louis, did not rule out that the rate could be raised by 0.75% straight away.
EUR/USD: Words Drive Trends
The main drivers of the past week were statements by important ECB and FRS officials. However, the beginning of the five-day period was relatively calm: the Easter weekend had its effect. Unlike the United States, Europe rested not only on Friday April 15, but also on Monday 18. The dollar was slightly supported on Monday by the comments from the representatives of the American regulator. According to Rafael Bostic, President of the Federal Reserve Bank of Atlanta, the base interest rate may be about 1.75% by the end of 2022, and Chicago Fed President Charles Evans believes that it will reach 2.25-2.50%. And the head of the Federal Reserve Bank of St. Louis, James Bullard, announced a possible rise in the key rate by 0.75% immediately at the May meeting of the FOMC (Federal Open Market Committee).
EUR/USD: Fed's Apples and ECB's Oranges
The dollar continues to strengthen, while the EUR/USD pair moves down. A week's low was recorded at 1.0757 after the ECB meeting on Thursday, April 14. After correction, the final chord, sounded at around 1.0808.
EUR/USD: Three reasons for the Strengthening of the Dollar
The proponents of a stronger dollar won by a very small margin in the previous forecast. 50% of analysts voted for its growth, 40% were against and 10% took a neutral position. The reason for such uncertainty and disagreement was that the market seemed to have already taken into account the increase in the dollar interest rate in 2022 for the quotes. However, despite this, the US currency has continued its growth. The DXY index has gained about 2% over the last week, and the EUR/USD pair, as predicted by bearish supporters, has broken through the support in the 1.0950-1.1000 zone and is aiming at the March 07 low of 1.0805. True, it has not yet managed to reach it, and the pair finished at 1.0874.
EUR/USD: Too Much Uncertainty
The movement of major currencies was determined throughout March by reports from the Russian-Ukrainian front, the sanctions-energy war with Russia, and the pace of monetary tightening. The US dollar has strengthened significantly in recent months thanks to a sharp increase in the yield of US government bonds and signals about an increase in the Fed's interest rate. The EUR/USD pair fell to 1.0805 on March 07, its lowest level since mid-May 2020. However, then the growth of the dollar stopped, and the pair moved to a sideways movement along the Pivot Point 1.1000. The hawkish statements of the Fed management pushed the pair down, the hopes for resolving the armed conflict between Russia and Ukraine sent it above this line.
EUR/USD: A Tangle of Chaos and Paradoxes
The title of the previous EUR/USD review had a question of whether the market has gone crazy. Many analysts agreed that financial markets behaved at least illogically following the March Fed meeting. And at most, it's just absurd.
EUR/USD: Has the Market Gone Crazy?
What happened in the market after the US Federal Reserve meeting can be called "the theater of the absurd". As expected, the regulator raised the key interest rate from 0.25% to 0.5% on Wednesday, March 16, for the first time since 2018. As expected, the dollar began to strengthen after that. But what no one expected was that the strengthening will last only about an hour and will amount to some 50 points. After that, it will be not the American, but the European currency that will begin to grow. As a result, the EUR/USD pair will fix a weekly high at 1.1137 the next day.
EUR/USD: Mega Event of the Week: US Federal Reserve Meeting
As expected, the main event of the past week was Thursday, March 10th, thanks to the meeting of the European Central Bank. The interest rate was left at the same level of 0%, and this was no surprise to anyone. But despite the absolute predictability of this decision, the EUR/USD pair first soared to 1.1120 after the statement of the regulator, and then fell below 1.1000. It's all about the failed attempt to "feed" both hawks and doves.
EUR/USD: The Fate of the Euro Is Decided in Ukraine
Macro statistics were mixed last week. But few people pay attention to it at the moment. The dynamics of European currencies is determined by what is happening in Ukraine for the second week now. The escalation of the Russian-Ukrainian armed conflict is intensifying, increasing the demand for risk-free assets. And it is the dollar that acts as such, not the pan-European currency.
EUR/USD: War Is Not Only Blood, But Also Business
The dynamics of European currencies is now determined by what is happening in Ukraine. You can forget about all kinds of macro-economic indicators for a while. Who and how much earned on Russia's invasion of a neighboring country, and who lost and how much, will become clear only when the situation stabilizes finally. And this may not happen soon.
EUR/USD: Waiting for War and Rate Hike
The period from February 10 to 14 was unexpectedly stormy. Panic moods were diligently warmed up by the leading media, actively discussing the statements of world leaders, primarily the President of the United States, regarding a possible Russian invasion of Ukraine. The White House even decided to relocate its diplomatic mission from Kiev, the capital of Ukraine, to Lviv, away from the zone of possible military operations and closer to the EU borders.
EUR/USD: Tsunami Due to US Inflation
Ancient Greeks began to declare a truce during the Olympic Games more than 2,800 years ago. It seems that the EUR/USD bulls and bears have decided to adopt this tradition during the current Winter Olympics in Beijing. We observed a complete lull for at least the first half of the week, and the pair moved eastward under slight pressure in a narrow channel not exceeding 60 points, 1.1400-1.1460.
EUR/USD: Another Surprise, from the ECB This Time
It's hard to resist when you're attacked from both sides. The dollar received two powerful blows last week: one from the Bank of England, the second from the ECB, and could not resist them. The USD DXY index flew down. While it was at the level of 97.36 on January 28, it dropped to 95.14 on February 04. This is not a knockout of course, but a knockdown from which it will be difficult for the US currency to recover quickly.
EUR/USD: Surprises from the US Federal Reserve
The meeting of the US Federal Reserve FOMC (Federal Open Market Committee) and the subsequent press conference of its management was certainly the main event of the last week. JP Morgan analysts called the speech of Jerome Powell, the head of the US central bank, the most “hawkish” of all during his tenure.
EUR/USD: FOMC Meeting: the Day the Markets Are Waiting For
The main event not only of the next week, but of the whole month will certainly be the meeting of the FOMC (Federal Open Market Committee) of the US Federal Reserve on January 26. Will the regulator raise interest rates now? Or in March? Or will it postpone the curtailment of incentives indefinitely? These questions remain unanswered.
EUR/USD: Rumors That Drive the Markets
The weather on the market is quite often determined by rumors which have very little to do with reality. Or nothing at all. But those who spread them can earn good money by speculating on them. Something similar seems to have happened last week.
EUR/USD: Awaiting the January FOMC Meeting
The EUR/USD pair has been in a sideways trend for seven weeks in a row, moving along the horizon 1.1300 in the 1.1220-1.1385 channel. Even the publication of the protocols could not get it out of this state of the December FOMC (Federal Open Market Committee) meeting of the US Federal Reserve, which confirmed the seriousness of this central bank's intentions to tighten monetary policy and strengthen dollars. Apparently, the regulator is frightened by the rate of inflation in the country. In addition, it did not expect the Omicron coronavirus strain to have a significant negative impact on economic activity in the United States.
We talked a week ago about what experts from the world's leading banks and agencies think about the behavior of the EUR/USD pair in the coming 2022. And the fact that we paid attention to it in the first place is quite logical: after all, this pair is the most traded on the Forex market, and the European currency itself leads by a huge margin in the formation of the US Dollar Index DXY, with 57.6%.
It is always interesting to know whose predictions came true and whose predictions did not. Exactly a year ago, we published forecasts given by experts from leading world banks regarding the EUR/USD rate for 2021, and now we can decide which of them was right and to what extent. Or, on the contrary, which one was wrong.
EUR/USD: Old News from the Fed And the ECB
The past week was the week of the Central Banks. The US Federal Reserve met on Wednesday, December 15, for the last time this year, the ECB and the Bank of England on December 16, and the Bank of Japan at the end of the working week, on Friday, December 17.
EUR/USD: Ahead of the Fed and ECB Meetings
We titled this section of the review “Employment and Inflation Decide Everything” last week. It is these two parameters that determine the monetary policy of central banks in the current situation. The next meeting of the US Federal Reserve will take place on Thursday, December 16, and the markets expect the regulator to speed up the procedure for curtailing incentives, and, perhaps, even increase the interest rate. Undoubtedly, these decisions will be influenced by the macro statistics released in recent days.