Back
3 Apr 2013
Forex: EUR/USD extends gains after US data
FXstreet.com (Barcelona) - Antecipation of disappointment on the ISM non-manufacturing PMI just released triggered a fall of the greenback on the US session. The EUR/USD climbed the chart from 1.2825 to 1.2861 high, for now, and remains attached to the highest levels of the day. Earlier, the ADP employment report was expected to rise from 198K to 200K in March, but February data was revised much higher, to 237K, and the March figure disappointed at 158K.
Now that today’s data is out, investors will be properly positioning themselves ahead of the ECB monetary policy and Draghi’s press conference. In regard to policy tools the ECB could use, TD Securities analysts said that new LTROs would generally be positive for EUR/USD and German rates “as there is enough excess liquidity in the system that market pricing for normalized money market rates is already pushed back to 2015”. “There is simply limited scope for new liquidity to alter this pricing significantly as it would likely be drained before then. Even a refi rate cut, as long as it comes with no strong language on the potential for a deposit rate cut, would likely eventually be EUR+ as the improvement in sentiment and funding would outweigh the muted moves in STIR”, wrote analyst Richard Kelly.
Mataf.net analysts point to resistance at 1.2875 and 1.2940. On the downside, supports might be found at 1.2790, 1.2755 and 1.2725.
Now that today’s data is out, investors will be properly positioning themselves ahead of the ECB monetary policy and Draghi’s press conference. In regard to policy tools the ECB could use, TD Securities analysts said that new LTROs would generally be positive for EUR/USD and German rates “as there is enough excess liquidity in the system that market pricing for normalized money market rates is already pushed back to 2015”. “There is simply limited scope for new liquidity to alter this pricing significantly as it would likely be drained before then. Even a refi rate cut, as long as it comes with no strong language on the potential for a deposit rate cut, would likely eventually be EUR+ as the improvement in sentiment and funding would outweigh the muted moves in STIR”, wrote analyst Richard Kelly.
Mataf.net analysts point to resistance at 1.2875 and 1.2940. On the downside, supports might be found at 1.2790, 1.2755 and 1.2725.