FOREX NEWS-Euro falls broadly as euro zone inflation slides
FOREX-Euro falls broadly as euro zone inflation slides
Tue Jan 6, 2009 7:34am EST
* Euro hits 3-week lows vs dollar, sterling
* Dollar hits 1-month high vs yen at 94.21 yen <JPY=>
* EZ inflation plunges to 26-month low in December
(Changes byline, adds comment, updates prices)
By Naomi Tajitsu
LONDON, Jan 6 (Reuters) - The euro fell broadly on Tuesday, hitting a three-week low versus the dollar after a fall in euro zone inflation added fuel to views that the European Central Bank will continue cutting rates as price pressures ease.
Losses in the euro prompted broad dollar gains, with the U.S. currency climbing above 94 yen against the Japanese unit to its highest level since the start of December, while the dollar index hit its highest in three weeks.
The single currency fell to its weakest since mid-December to the dollar and sterling after inflation in the region came in at 1.6 percent on the year from 2.1 percent in November to its lowest level in more than two years [ID:nL6532861].
The ECB targets inflation at just under 2 percent, and many in the market consider a fall below that level as keeping the door open to more aggressive rate cuts from the current 2.5 percent to deal with a deteriorating economy.
"(The data) will further free the ECB to cut interest rates at next week's meeting," said Adam Cole, global head of currency strategy at RBC in London.
"The balance of news from Europe is so poor that the market is perceiving that the ECB is behind the curve (on rates)," which was driving recent weakness in the euro, he said.
The ECB is expected to cut its key lending rate by 50 basis points or more at its policy meeting next week. In the run-up to the gathering, ECB officials have been suggested that rates could come down more in the future.
At 1216 GMT, the euro had fallen roughly 2 percent to $1.3331 to its weakest since Dec. 12.
Against sterling, the single currency fell roughly 1.5 percent to 91.00 pence according to Reuters data, its lowest since Dec. 17. The pair has tumbled dramatically after hitting a record high of 98.05 pence last week.
The dollar rallied across the board, climbing as high as 94.21 yen <JPY=> according to Reuters data, its highest since the start of December. Against a basket of currencies .DXY, the dollar rose as high as 83.871, its strongest in more than three weeks.
Tuesday's dismal data comes on the heels of an index of the euro zone private sector services economy which fell to its lowest in the survey's 10-year history and suggested that the region will be in a deep recession for at least much of 2009 [ID:nL6511784].
Growing evidence that the economy is suffering while inflation pressures ease has ripened conditions for lower rates even as the ECB slashed rates from 4.25 percent since October.
On Monday, ECB Governing Council member Vitor Constancio said monetary policy would respond with interest rate cuts to maintain inflation around 2 percent if necessary. [ID:nL5259330]
"European monetary policy does not only worry that inflation rises a lot, but also if it falls a lot," he said in Lisbon.
That follows remarks by ECB Vice President Lucas Papademos, who said on Sunday that more rate cuts may be warranted to shield the euro zone from recession. [ID:nL54973]
The ECB has cut interest rates to help the euro zone economy but the euro still enjoys a comparative advantage over peers such as the dollar and the yen, with euro zone rates at 2.5 percent versus close to zero in the United States and Japan.
But the euro's recent declines indicate that it will no longer be immune from the region's poor economic data.
"Despite the weakening euro zone economy, the euro had a free ride for the last couple of months of 2008, piggybacking on the market's more negative view of other economies, in particular that of the United States and Britain," said strategists at Calyon in a note.
Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
Forex Trading News
Daily Forex Market News Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Forex News Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."
Actionable trading levels delivered to YOUR charts in real-time.
Mon 19 Mar 2018 Tue 20 Mar 2018 AA 9:30 GB- CPI A 10:00 DE- ZEW Survey Wed 21 Mar 2018 AA 03:00 AU- Employment AA 9:30 GB- Employment A 12:30 US- Current Account AA 14:00 US- Existing Homes Sales A 14:30 US- EIA Crude A A18:00 US- Fed Rate Decision A 21:00 NZ- RBNZ Rate Decision Thu 22 Mar 2018 AA All Day flash PMIs AA 9:30 GB- Retail Sales AA 12:00 GB- Bank Of England Decision A 13:30 US- Weekly Jobless Fri 23 Mar 2018 AA 12:30 CA- CPI/Retail Sales A 12:30 US- Durable Goods A 14:00 US- New Homes Sales
John M. Bland, MBA co-founding Partner, Global-View.com
Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.
looking for your first broker or do you need of a new one? There are
more critical things to consider than you might have thought.
We were trading long before there were online brokers. Global-View
has been directly involved with the industry since its infancy. We've
seen everything and are up-to-data with recent regulatory changes.
The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.
The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.
Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.
The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.
Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.
Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.
Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.
WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES
CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN
EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE
PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE
INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC
REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL
SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR
SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.