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Week in FX: Europe Nov. 13-18

It was a week of spreads. The failure of the ECB to wholly stabilize Italian, Spanish and French yields, despite political developments in Italy, had the market applying risk aversion trading strategies slowly all week. Most EUR relief rallies provided the market better opportunities to either exit their riskier positions or instigate further negative bets. As the slow-motion risk meltdown continues it has allowed the dollar and the yen to trade broadly firmer. The Swiss, as a reserve currency, has been taken out of the equation because of the SNB revaluation actions.

The absence of an aggressive ECB bid has further boosted perceptions of systemic risk in the Euro area.The surprise to most has been how orderly and gradual the FX moves have occurred. Normally, with any risk aversions trading strategy decision, “Panic” seems to be the outlier as investors all run for the exits at the same time.

Below are some other highlights of the week:


EUROPE

 

Other links:
US Data Starting Its Own Trend? [1]
Aussie dollar on one knee with Yen in demand [2]
ECB or the EUR to Crack? [3]

 

WEEK AHEAD

  • USD starts their shortened trading week with existing home sales
  • MPC minutes and inflation expectation come from GBP, NZD and USD
  • Another quite week for CAD with only Retail Sales
  • Growth and durable goods are reported from GBP and USD
  • CNY delivers flash manufacturing PMI
  • Germany dominates the business climate reports

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [8]

Vice-President of Market Analysis at MarketPulse [9]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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