4 Dec 2014
EUR/USD breaks its month-long range to trade lower – DBS
FXStreet (Barcelona) - The DBS Research Team notes that the EUR/USD pair broke below its month-long range between 1.2357-1.2599 ahead of today’s ECB meeting, currently trading around yesterday’s close of 1.2310.
Key Quotes
“In the Eurozone, EUR/USD broke below its month-long range between 1.2357 and 1.2599 ahead of today’s European Central Bank (ECB) governing council meeting. Closing at 1.2310 yesterday, EUR/USD is not far from its mid-2012 low at 1.2040. ECB President Mario Draghi had blamed the euro’s strength since mid- 2012 for deflation risks in the Eurozone.”
“Taking stock, EUR/USD has been depreciating sharply from near-1.40 since May without QE, and yet, headline inflation moderated to 0.3% (YoY) in Nov14 from 0.5% in May14. Core inflation, however, did not fall below 0.7% at all."
"In Ger¬many, ZEW and Ifo surveys were better in Nov14 and real GDP growth for Eurozone turned out better in 3Q14. Against this background, Draghi is expected to exhibit the same patience as his deputy, Vitor Constancio, in delaying the QE decision to 1Q15.”
Key Quotes
“In the Eurozone, EUR/USD broke below its month-long range between 1.2357 and 1.2599 ahead of today’s European Central Bank (ECB) governing council meeting. Closing at 1.2310 yesterday, EUR/USD is not far from its mid-2012 low at 1.2040. ECB President Mario Draghi had blamed the euro’s strength since mid- 2012 for deflation risks in the Eurozone.”
“Taking stock, EUR/USD has been depreciating sharply from near-1.40 since May without QE, and yet, headline inflation moderated to 0.3% (YoY) in Nov14 from 0.5% in May14. Core inflation, however, did not fall below 0.7% at all."
"In Ger¬many, ZEW and Ifo surveys were better in Nov14 and real GDP growth for Eurozone turned out better in 3Q14. Against this background, Draghi is expected to exhibit the same patience as his deputy, Vitor Constancio, in delaying the QE decision to 1Q15.”