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4 Dec 2014
Dollar firms ahead of ECB – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team note that the major currencies trade in narrow ranges against the dollar today as markets await statement from the ECB meeting.
Key Quotes
“ECB President Draghi and Vice President Constancio have expressed heightened urgency to boost inflation as fast as possible. This has been countered by others arguing to give the other new initiatives, including the second TLTRO (next week), a chance to work. Moreover, Bundesbank's Weidmann has argued that the drop in oil prices will also provide stimulus that had not been counted on previously.”
“The major currencies are in narrow trading ranges against the dollar today. The euro has been confined to 15 bp on either side of $1.2310. The dollar has been confined to less than a quarter of a yen below JPY120. Sterling has enjoyed a somewhat wider range of 40 pips, but is trading within yesterday's ranges. It has remained within the ranges seen Monday over the last three sessions.”
“Although there are some who expect Draghi to give clear commitment that sovereign bonds will be purchased next year or sooner (reflected by the rally in European bonds and stocks and the decline in the euro), there seems to be recognition of the risk of some disappointment. Many want to sell into the euro bounce.“
“The euro and pound are little changed at $1.2320 and $1.5680, respectively. The Australian dollar is the biggest loser, falling to a new cycle low of $0.8370 despite supportive data. The US dollar is trading just below the ¥120.00 level, but has not yet breached it.”
Key Quotes
“ECB President Draghi and Vice President Constancio have expressed heightened urgency to boost inflation as fast as possible. This has been countered by others arguing to give the other new initiatives, including the second TLTRO (next week), a chance to work. Moreover, Bundesbank's Weidmann has argued that the drop in oil prices will also provide stimulus that had not been counted on previously.”
“The major currencies are in narrow trading ranges against the dollar today. The euro has been confined to 15 bp on either side of $1.2310. The dollar has been confined to less than a quarter of a yen below JPY120. Sterling has enjoyed a somewhat wider range of 40 pips, but is trading within yesterday's ranges. It has remained within the ranges seen Monday over the last three sessions.”
“Although there are some who expect Draghi to give clear commitment that sovereign bonds will be purchased next year or sooner (reflected by the rally in European bonds and stocks and the decline in the euro), there seems to be recognition of the risk of some disappointment. Many want to sell into the euro bounce.“
“The euro and pound are little changed at $1.2320 and $1.5680, respectively. The Australian dollar is the biggest loser, falling to a new cycle low of $0.8370 despite supportive data. The US dollar is trading just below the ¥120.00 level, but has not yet breached it.”