Week in FX Europe – A weaker EUR and Yen Conspires to Kill US Exports

With this strong move higher of the dollar across the board, further pressure on the EUR is certainly logical, but how much more? Thus far, the dollar has retained its strong bid tone that has been fueled by USD/JPY’s rise above firstly ¥100, then ¥101 and now threatening ¥102 in the past 24-hours. Indeed it was also heavy macro fund buying of USD/CHF that has been a factor for the EUR to handily slip below 1.3000 late this week. Thrown in some Euro official account selling and hiking of corporate bids near the single currency’s stellar support levels (1.2970-80) has allowed the EUR to consider spiraling through its 200-DMA (1.2950). A close well below this level will only add to the further bearish pressure of 17-member currency.

The ECB cutting rates last week and even hinting at more easing, coupled with Euro-policy makers remarks suggesting that that they are prepared to even go down the negative rate route if its required to get the Euro-zone economy back on a strengthening path, may be enough ‘juice’ to take on this longer term support. By day’s end, the EUR and Yen conspire to kill US exports – a viscous circle we are creating!

• Spain Auctions 4.57 Billion at 2.24 Percent
• EUR/GPB at 0.8430 as Output Climbs and BOE Maintains Policy
• UK Continues to Oppose Financial Transaction Tax
• Bank of England Holds Rate Steady as Governor King Steps down
• Slovenia Working on Plan to Avoid EU Bailout
• EU Rehn Blasts Cyprus for Ignoring Warnings
• UK Retail Sales Fall Hurt by Earlier Easter
• UK PM Cameron unable to call for EU Referendum
• IMF Reports Greece Has Made Progress Warns about Tax Evasion
• Russia Extends Maturity and Cuts Rate on Cyprus Bailout
• Europe Retail Sales Fall in March
• ECB Member Says Rates Could be Cut Further
• Italian Economy to Shrink 1.4 Percent in 2013
• Era Of Austerity Over For France

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