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Week in FX Europe- ECB EU Growth Forecast Cut Drags Euro

ECB Chairman Mario Draghi’s statement after the European rate announcement deflated the euro after the EU growth forecast was reduced. The benchmark interest rate was held at 0.75 percent, but growth forecasts were slashed for this year and the next. The possibility of a rate cut next year is started to be priced in by the market. The ECB statement resulted in a further drop for the euro which had the worst one day loss in a month. Better than expected US employment data added to the single currency pain as the USD got a boost from a lower unemployment rate.

This week finance ministers from the EU met to reach an agreement regarding a eurozone banking union with the ECB at the head. France and Germany were at opposing sides of the argument where no side was able to persuade the other and talks will continue. Funny enough French FinMin Pierre Moscovici and German FinMin Wolfgang Schaeuble are both in the running to replace outgoing president of the EU Jean-Claude Juncker at the end of the year.

 

WEEK AHEAD

  • CNY Consumer Price Index (YoY)
  • JPY Gross Domestic Product
  • CNY New Yuan Loans
  • EUR German ZEW Survey
  • GBP Jobless Claims Change
  • USD Federal Open Market Committee Rate Decision* EUR ECB Publishes Monthly Report
  • JPY Tankan Large Manufacturers Outlook
  • USD Consumer Price Index

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Alfonso Esparza

Alfonso Esparza [16]

Senior Currency Analyst at Market Pulse [17]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza