Wednesday, March 25, 2015

1.10 seems the limit for EUR/USD

     1.10 seems the limit for EUR/USD
    Went over 1.10 once on 19 March, several times yesterday but unable to maintain it
    USD retreat is fundamentally based on lower US rate expectations and lower rates
    BUT as QE proceeds, Eurozone rates likely to move lower, while accelerating US inflation likely to push US rates higher = USD-supportive

     WTI up even though API stats show further rise in oil stocks
    Due to strong PMIs, perhaps?
    US Dept of Energy’s oil inventory data, to be released tonight, may reverse the move

     Cleveland Fed says don’t worry about dollar’s effect on inflation
    Says the threat of stronger dollar pushing down inflation is “overblown”
    This eliminates one big reason why the Fed might refrain from tightening

     Today:
    Eurozone: German Ifo survey expected to rise; could be EUR-supportive
    Sweden:  Economic tendency survey for March

    US: Durable goods for February: headline figure expected to decelerate, but core (excluding transportation) expected to accelerate = could be USD-positive

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