EUR Bias Remains The Same

It’s difficult to get excited by helicopter Ben two days in a row, however, here we are and its seems we have to try. Yesterday, he followed through with only his history lecture, urging us to keep the lessons from the Great Depression to evaluate recent Fed actions and no QE. Today, in a market that screams of “we have been here before,” we hope for our own market sanity that that he will say something to break this trading monotony. The hottest thing in the market yesterday was the new iPad, so either Ben “goes for it” or we could be in for another long day.

The EUR is leading the G10 rally against the dollar despite Asian equities being mixed in the overnight session. The single currency has managed to strengthen on the back of the Greek Prime Minister winning parliamentary approval for their second and most likely not their last international bailout. The currency is here, knocking on its monthly outright highs, because its cheap according to many. In January, it traded at its seven-year lows on a trade weighted basis. As expected and rightly, many of us took the opportunity of the ECB’s LTRO operation to use the currency to buy the antipodean ‘carry’ trade. However, Chinese growth concerns has many questioning this risk-correlated trading strategy. This EUR short squeeze is trying to gather momentum as these risk currencies, with strong trading ties to China come under pressure.

The outlier ahead of the North American open is GBP. It’s trading under pressure outright after the BoE minutes release showed that members had voted 7-2 against QE, it’s the two that has Sterling choking early. There was little surprise with the white wash, 9-0, on the no rate hike.

Crude has stopped the bleeding and rallied after yesterday’s -2.3% decline, its largest loss in three-months, and giving some of the commodity currencies a reason to do something. The loonie is again straddling its weekly high with little danger of any significant run ahead of retail sales and CPI later in the week. The currency is again running into some technical resistance at these levels. The dollar bids will remain on these pullbacks until the CAD can break this tedious contained range. Following yesterday’s strong US housing starts for last month, a firm existing home sales reading later this morning should provide some support for the ‘mighty buck,’ limiting the loonie progress and tempering the EUR advance or at least until the market can digest Ben!

Forex heatmap

Other Links:
US Housing Starts Strong

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at Visit to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
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