Week in FX – EUR Weakness Not About the EURO

The EUR is simply not wanted and all because everyone covets the ‘big’ dollar after Friday’s stellar US jobs report. The single currency’s drop is threatening to seek new week lows, and it seems it would prefer to do so with some conviction. The currency’s decline looks even more dramatic since Draghi comments on Thursday were able to push the 17-member unit to take a peek above 1.3100 for a brief period.

Previously, the EUR had rallied nicely from the ECB rate announcement intra-day lows mostly on the back of investor’s prior positions. A higher percentage of individuals were expecting for, at the “very least,” more dovish words from Draghi. Squeezing the weaker EUR shorts perhaps even further was the “no mention” of the single units value. The market handily caught a bid on the back of the ECB possibly feeling a bit more comfortable with the exchange rate. However, that has all now changed.

Market consensus seems to now expect the EUR to weaken as the gap between the economies of the US and Euro-zone continues to widen. The demise of risk on/risk off and the emergence of new macro stories GBP, JPY and USD are making these markets a lot more interesting and much easier to define.

• Decision Against Further Easing has BlackRock Selling Pound
• Mario Draghi Calls for Structural Reforms to Stabilize EU Economy
• French Unemployment Hits 10.6 Percent
• UK House Prices Rise in February
• BoE Governor Favours Breaking up RBS
• UK Osborne Stands Alone as EU Push for Bank Bonus Cap
• Euro Deal Would Cut Irish Borrowing
• Head of Nissan Warns Europe Car Market Collapsing
• UK Service Sector Data Boosts Chances of Triple-dip Recession
• UK Chancellor Osborne Against EU Cap on Bank Bonuses
• Euro Leaders – No Way Out of Austerity
• Italy Nears New Vote as Euro Leaders Demand Austerity

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