Mario Draghi Disappoints Forex Markets by Delaying Discussion of Quantitative Easing

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Forex Trading

: 05 December 2014

European Central Bank President Mario Draghi surprised the media by saying that the central bank will wait until next quarter before assessing the need for additional stimulus measures.

The forex markets were disappointed by the ECB's lack of action, which helped the euro gain 69 points versus the US dollar to close at $1.2379.

Nevertheless, it would take a lot of courage to consider this move to be part of a long-term turnaround as the US economy remains a few steps ahead.



Forex Trading

: 04 December 2014

The current situation on either side of the Atlantic reflects an obvious contrast in fortunes which could be here to stay.

Almost everything in the US seems to be encouraging, whilst Europe continues to struggle.

Yesterday's Eurozone retail sales were no exception and the composite Purchasing Managers Index fell to 51.1, its weakest level in 16 months.

Consequently, the shared currency moved another 71 points lower against the dollar to $1.2310, a fresh 2 year low.



Forex Trading

: 03 December 2014

Whilst the US ended its quantitative easing in October, Europe is seeing a stronger and stronger case for increased stimulus.

This divergent state of affairs cannot be denied, offering almost unconditional support to the US dollar against the euro.

The EUR/USD pair resumed its slump yesterday, losing 88 points to $1.2382 and is back on its way to test the recent low of $1.2358.



Forex Trading

: 02 December 2014

Ahead of the ECB interest rate meeting on 4 December, German manufacturing dropped unexpectedly, which points to a worsening scenario in the Eurozone.

With the risk of stagflation now looming large, investors increased speculation that the central bank will need full scale QE.

Even so, the shared currency rebounded 22 points against the dollar to $1.2469.



Forex Trading

: 01 December 2014

Inflation in the Eurozone slowed in November to a five year low, in line with expectations.

This kept the ECB under pressure to add additional stimulus and spur growth, especially whilst oil prices remain in free fall.

So, despite some stronger than anticipated retail sales data in Germany, the euro lost 28 points versus the US dollar to $1.2439.


By Jonathan Sudaria, 5 December 2014


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