29 Nov 2013
Flash: EUR/USD focused on ECB policy meet and NFPs - BTMU
FXstreet.com (Barcelona) - FX Strategists at the Bank of Tokyo Mitsubishi UFJ note that the euro continues to recover lost ground following the ECB’s decision to lower their refinancing rate to 0.25%.
Key Quotes
“The ongoing tightening of liquidity conditions in the Euro-system is encouraging a stronger euro in the near-term as the EONIA rate grinds higher.”
“We do not expect that the ECB will ease monetary policy further at next week’s policy meeting which will likely be required to weaken the euro materially.”
“However, the unveiling of the latest ECB staff forecasts and President Draghi’s press conference should signal that further monetary easing remains likely next year given the outlook for low inflation and weak growth in the euro-zone.”
“In contrast economic data releases from the US in the week ahead should prove supportive for the US dollar. The non-farm payrolls report is expected to reveal that employment growth remained firm in November with the unemployment rate expected to drop sharply, as the temporary distortion from the government shutdown is reversed.”
“Investor expectations may rise that the Fed could begin to taper QE at the December meeting.”
Key Quotes
“The ongoing tightening of liquidity conditions in the Euro-system is encouraging a stronger euro in the near-term as the EONIA rate grinds higher.”
“We do not expect that the ECB will ease monetary policy further at next week’s policy meeting which will likely be required to weaken the euro materially.”
“However, the unveiling of the latest ECB staff forecasts and President Draghi’s press conference should signal that further monetary easing remains likely next year given the outlook for low inflation and weak growth in the euro-zone.”
“In contrast economic data releases from the US in the week ahead should prove supportive for the US dollar. The non-farm payrolls report is expected to reveal that employment growth remained firm in November with the unemployment rate expected to drop sharply, as the temporary distortion from the government shutdown is reversed.”
“Investor expectations may rise that the Fed could begin to taper QE at the December meeting.”