After a sustained run to the upside,
the US dollar has been ready for a pull-back for a little while and it happened
at the start of the NY session yesterday after retail sales figures for March
were announced. They were actually the best retail sales figures in a year, but
as they failed to come in at or above expectations, and as the trend over the
last three readings has been disappointing, the market used them as the
catalyst for a dollar sell-off.
The EURUSD pair rose by a
considerable amount, over 1%, (a rise in EURUSD means a weakening USD) and only
the twin resistances of the nice round number of 1.07 and the 200-hour
Exponential Moving Average (EMA), which is in evidence just above there, at
1.07185, brought the move to an end (see chart).
Can
the ECB monetary policy statement have any surprises?
And all indications are that the Euro
side of the EURUSD equation will not be greatly affected by the ECB monetary
policy statement later today. Mario Draghi will make this, and hold his press
conference, around lunch time GMT. Nearly all that he might have to say is
already accounted for: There will be no rise in interest rates; Quantitative
Easing is under way and is only in its early stages – it is far too soon for
any adjustments; Inflation and other indicators are rising off the bottom, but
again it is early days. On this score the Harmonised Index of Consumer Prices
(HICP), which provides inflation data for Germany, and which will be released at
07:00 GMT, could have a bearing on the manner in which the market greets the ECB
monetary policy statement later.
The only unknown is in relation to
the Greek situation, although we do not normally have to wait for the monetary
policy statement and press conference to get updates on that.
Still, the occasion demands respect,
and the market will sit up and pay attention.
No comments:
Post a Comment