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Euro Still Looking Weak Despite Draghi’s Moves

October 6, 2014 0 Comments

If the intervention of Mario Draghi had helped draw up the euro yesterday, the downward trend prevails again this afternoon, while European statistics remain misguided. At this time, losing 0.42% against the dollar at 1.2620 dollar, reversing its progression from the previous day.

In contrast, the euro against the yen remains neutral (0.07% to 137.47) in sterling (+ 0.04% to 0.7851) and Swiss franc (+ 0.03% to 1.2089) *.

The press conference held by the President of the ECB, Mario Draghi, was followed yesterday by a sharp decline in equity markets and a rising euro.

As summarized by analysts at Aurel BGC, according to figures of activity disappointing some investors were expecting a new ‘measure magic’ of ‘super Mario’. But the European Central Bank has exhausted many of its tools and it seems to want to make a ‘pause’ to judge the effectiveness of its recent decisions. ‘

‘The ECB has disappointed by not detailing the size of the asset purchase program that will launch’ in two weeks, says another expert.

However, the rising euro cut short today. Indeed, although not quantified, buyouts of private fixed income assets of the ECB will begin shortly, and the ECB still intends to increase “substantially” the size of its balance sheet, taking it from its current level (a little over 2,000 billion) to around 3,000 billion, as in 2012.

‘How far can the dollar climb it?’ Wonder traders of Societe Generale. they estimate that adjusted data, the dollar is still 10% lower than it was ten years Voia. Since the end of the ultra-loose monetary policy approaches, SG believes that the ticket will continue to gain ground, especially against emerging currencies and those of the countries ‘raw materials’, such as Canada or Australia. Indeed, the rapid increase in debt levels puts emerging thank you to a voltage of interest rates. The euro is also concerned, given the increasing divergence of monetary policy on both sides of the North Atlantic.

In addition, European statistics still indicate that growth remains weak, and even close to zero in France. We learned this morning that the PMI services in the euro area fell to 52 points in September in the second estimate. It was revised by 0.3 points compared to the estimate ‘flash’, is less than 0.5 percentage points than in August and fell to its lowest level in ten months.

Filed in: Euro Forecast

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