The euro remains under pressure
02.09.2014
On Tuesday the main currency pair remains in the power of the "bears", but there is no other option: ahead is the ECB meeting and the flow of statistics.
The daytime statistics for the euro area has made absolutely no impression on the main currency pair: ahead is too much important information to expend energy on ordinary reports. The producer price index in July in the euro area fell by 1.1% y/y, as expected, an m/m the index decreased by 0.1% with the forecast of zero.
However, all of this is within the framework of global expectations. Ahead is the main event – on Thursday there will be a meeting of the European Central Bank, the results of which will adjudicate the interest rate decision and comments on the future steps of fiscal control.
Do recall that preliminary inflation reports for August showed the CPI in the euro area at 0.3% y/y. Low? Very. For the euro area, a sufficiently strong region, such a small inflation carries many risks. Besides, I have already mentioned that the Europeans greatly save, despite the drop in prices. The horizon of the European economy even before the end of the year is very vague, and consumers clearly opt for the "save" rather than the "spend" option.
In September and October the ECB is scheduled to hold two LTRO auctions. Will they be effective? It is difficult to clearly answer this question, although the probability of a weak improvement still exists. Banks do not really need the money - rather, they need strong guarantees that the loans will come back to them in time. But such assurances the ECB just cannot provide. L
It is likely until Thursday the reactions in the euro/dollar will be as vague as they were today and yesterday.
RoboForex Analytical Department
The daytime statistics for the euro area has made absolutely no impression on the main currency pair: ahead is too much important information to expend energy on ordinary reports. The producer price index in July in the euro area fell by 1.1% y/y, as expected, an m/m the index decreased by 0.1% with the forecast of zero.
However, all of this is within the framework of global expectations. Ahead is the main event – on Thursday there will be a meeting of the European Central Bank, the results of which will adjudicate the interest rate decision and comments on the future steps of fiscal control.
Do recall that preliminary inflation reports for August showed the CPI in the euro area at 0.3% y/y. Low? Very. For the euro area, a sufficiently strong region, such a small inflation carries many risks. Besides, I have already mentioned that the Europeans greatly save, despite the drop in prices. The horizon of the European economy even before the end of the year is very vague, and consumers clearly opt for the "save" rather than the "spend" option.
In September and October the ECB is scheduled to hold two LTRO auctions. Will they be effective? It is difficult to clearly answer this question, although the probability of a weak improvement still exists. Banks do not really need the money - rather, they need strong guarantees that the loans will come back to them in time. But such assurances the ECB just cannot provide. L
It is likely until Thursday the reactions in the euro/dollar will be as vague as they were today and yesterday.
RoboForex Analytical Department
Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.