User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday June 5, 2009 - 14:36:11 GMT
BHF-Bank -

Share This Story:
| | Email

FX Briefing - ECB goes into wait-and-see mode

FX Briefing 5 June 2009


·        ECB leaves refinancing rate unchanged at 1.0%

·        ECB staff revise growth forecasts down significantly

·        Latvia wants to maintain peg to euro, but under massive pressure to devaluate


ECB goes into wait-and-see mode

Since rallying at the end of last week, EUR-USD has been moving sideways for the most part, hovering around 1.42. Towards the middle of the week, the euro’s attempt to breach 1.43 was thwarted by some disappointing indicators from the US and guarded comments on the economic outlook from Fed chairman Ben Bernanke. The impending release of the US labour market report could have played a part too.


At the moment, currency turbulence in eastern Europe, currently focused on the Latvian lats, is supporting the euro to some extent. Against the backdrop of a dramatic economic collapse, the

lats, which has a fixed exchange rate against the euro, has come under increased pressure to devaluate. The Latvian government is having to make drastic budget cuts (which have already been passed in the first reading and are due to be introduced on 17 June) before receiving the next tranche of the bailout loan (over €1.4bn) from the EU and the International Monetary Fund. Speculation came to a head this week after a failed bond auction. Furthermore, a government adviser had said that devaluation of the Latvian currency was just a matter of time. Both the central bank and the government have, however, emphasized their determination to keep the peg to the euro, and at Thursday’s press conference, ECB president Jean-Claude Trichet himself supported maintaining the currency peg. The turbulence around the lats is having a widespread impact. On the one hand, because Estonia and Lithuania in particular are not much better off either. Hungary and Poland – both in a difficult budget situation and with high current account deficits – are also feeling the repercussions. On the other hand, because devaluation could prove risky for the banking system in Latvia and the whole of the Baltic region. Swedish banks too are heavily exposed here, which is reflected in the Swedish krona’s marked weakness. Only a few days ago, the Swedish Riksbank, with the help of the finance ministry, increased its foreign currency reserves in order to have sufficient funds at its disposal again.


ECB: end of easing for the time being

The ECB has left the refinancing rate on hold at 1.0%. President Trichet’s comments at the press

conference indicate that the ECB sees no necessity for further interest rate cuts or additional unconventional measures at the moment. The ECB governing council regards the current interest rate level as “appropriate” and growth and inflation risks as “balanced”.


The sideways movement of monetary policy is in direct contrast to the assessment of the economic environment. The ECB governing council admits that the economic outlook has deteriorated significantly in the last three months, both in the eurozone and world wide. According to the statement, the contraction in economic activity will continue until the middle of next year, when a gradual recovery is expected to set in. The ECB staff projections envisage real GDP at around –4.6% this year, and falling by a further 0.2% next year (middle of the range). Prices will continue to be dampened by weak demand for some time to come. The staff projections see the inflation rate at a mere 1% in 2010 – significantly below the ECB’s stability target.


The ECB council meeting did not have a sustained impact on the forex market. Shortly before the meeting, EUR-USD had dropped well below 1.41 for a time, only to climb back to 1.42 after the decision had been announced. The short end of the yield curve reacted differently, however; it shot up. Yields on 2-year Bunds rose by almost 20 points to 1.59, the interest rate advantage over the equivalent US Treasuries widened by more than 10 points.


The ECB’s policy stance – the end of monetary policy loosening, at least for the time being – should fundamentally support the euro. In the longer term, things will depend on whether the ECB’s economic projections prove to be correct or not. In our view, action still needs to be taken. On the basis of the ECB projections, the output gap will increase during the whole of the forecast period, and presumably even longer. Thus the deflationary impetus will not only continue, but actually intensify. At the same time, the inflation rate will remain below the stability norm. Against this backdrop, we still see a possibility of further monetary loosening, even if this is not acute at the moment. EUR-USD could thus suffer a setback, despite the fact that the sharp increase in US government debt and the growing need for US current account correction are structurally against the dollar.



Stephan Rieke +49 69 718-4114

Economics Department

+49 69 718-3642

[email protected]

Foreign Exchange Trading

[email protected]

Jörg Isselmann

+49 69 718-2695

Matthias Grabbe / Klaus Näfken

+49 69 718-2688


<i>This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHF-BANK Group") solely for the information of its clients. The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities. This publication must not be distributed in the United States.

© 2007 BHF-BANK Aktiengesellschaft

All rights reserved. Please mention source when quoting from it.



Forex Trading News

Forex Research

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 here.

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.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

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.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you 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.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

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.

Forex News

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

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

Forex Brokers

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 Trading

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.

FX Trading

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.

Forex Blog 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105