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14 Mar 2014
Flash: EUR retracing Thursday’s gains - Scotiabank
FXStreet (Guatemala) - Eric Theoret, Currency Strategist at Scotiabank explained the EUR is up modestly vs the USD, one of the sole performers alongside JPY.
Key Quotes
"EUR is retracing some of Thursday’s decline—initially driven by the broader tone but later impacted by ECB President Draghi’s speech."
"The key passage of the speech was as follows: “The strengthening of the effective euro exchange over the past one and a half years has certainly had a significant impact on our low rate of inflation and, given current levels of inflation, is therefore becoming increasingly relevant in our assessment of price stability.” Such rhetoric follows last Thursday’s quantified discussion on EUR and price stability and represents the Draghi’s most forceful public discussion of the exchange rate since its mention as a downside risk to price stability in the February 2013 opening statement."
"This is a delicate topic for G7 central banks given that they are unified in their commitment to market determined exchange rates as they balance ‘domestic objectives using domestic instruments’ and as they refrain from targeting exchange rates. Lastly, in terms of data releases, Germany’s inflation figures were as expected and euro area employment rose 0.1% QoQ, its highest level since Q2 2011."
"EUR/USD short-term technicals: bullish—momentum indicators are bullish but moderating”.
Key Quotes
"EUR is retracing some of Thursday’s decline—initially driven by the broader tone but later impacted by ECB President Draghi’s speech."
"The key passage of the speech was as follows: “The strengthening of the effective euro exchange over the past one and a half years has certainly had a significant impact on our low rate of inflation and, given current levels of inflation, is therefore becoming increasingly relevant in our assessment of price stability.” Such rhetoric follows last Thursday’s quantified discussion on EUR and price stability and represents the Draghi’s most forceful public discussion of the exchange rate since its mention as a downside risk to price stability in the February 2013 opening statement."
"This is a delicate topic for G7 central banks given that they are unified in their commitment to market determined exchange rates as they balance ‘domestic objectives using domestic instruments’ and as they refrain from targeting exchange rates. Lastly, in terms of data releases, Germany’s inflation figures were as expected and euro area employment rose 0.1% QoQ, its highest level since Q2 2011."
"EUR/USD short-term technicals: bullish—momentum indicators are bullish but moderating”.