Forex Update 3 May 2013

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Forex Trading: 03 May 2013

As widely anticipated, the benchmark interest rate in the Eurozone was lowered by 25 basis points to 0.5% yesterday, with ECB President Mario Draghi refusing to deny that further cuts could take place.

The move was adopted as a result of climbing unemployment coupled with a decline in inflation and set against a background of persisting economic contraction.

The reaction was rather swift in the forex markets, with the EUR/USD pair losing 115 points for the day to close at $1.3064.



Forex Trading: 02 May 2013

Across Europe, the first of May brought occasionally violent demonstrations against the austerity measures which are now even being questioned by Brussels' officials.

However, the common currency paid little attention, with the EUR/USD pair surging to its highest level since 25 February at $1.3242, only to retrace towards the close and settle just 15 points up at $1.3165.

With the Eurozone still in recession, the ECB is widely expected to cut rates by 0.25% at its meeting today.



Forex Trading: 01 May 2013

In FX online spread betting, the common currency managed to reverse course yesterday, recouping earlier losses as speculation that the ECB will cut interest rates on Thursday boosted sentiment towards the Eurozone.

In addition, the 68 point gain to $1.3167 might have been helped by resilient US confidence figures, which fuelled the afternoon's risk on sentiment in global markets.



Forex Trading: 30 April 2013

Amid widespread expectation that the European Central Bank will cut its benchmark interest rate to a record 0.5% from 0.75%, the euro-dollar pair surged 47 points to $1.3098 yesterday.

The rally was supported by news that Italy, which finally managed to form a government, was able to sell five and ten year bonds at the lowest yield since 2010.



Forex Trading: 29 April 2013

European Central Bank officials have been quick to point out that bailing out Cyprus by imposing levy on deposits did not trigger large scale withdrawals.

Although that is debatable since capital controls are in place and the long term effects on investors' confidence is anyone's guess. Nevertheless, the euro found enough strength to gain 23 points on Friday to close at $1.3033.



Forex Trading: 26 April 2013

Amid growing speculation that the European Central Bank will cut its record low interest rate at next week's meeting, the shared currency finished rather flat at $1.3012.

Although the recent economic data from the Eurozone has been pretty disappointing lately, with Spanish unemployment hitting a record 27.2% and even Germany showing signs of weakness, the euro has been largely range bound.



Forex Trading: 25 April 2013

True to its recent pattern, the euro started the day on the back foot, even sliding briefly below the $1.30 mark, only to rebound during the afternoon and close 13 points higher at $1.3016.

The German confidence numbers confirmed an already pessimistic mood among European investors.

However, reassuring comments by ECB Vice President Constancio that the central bank 'has room to act on a rate cut' somehow saved the day.



Forex Trading: 24 April 2013

The German purchasing manager index has undoubtedly disappointed spread betting investors, casting doubt on there being better days ahead for Europe's biggest economy.

At the same time, data for PMI in the whole region was also weaker than forecast, triggering speculation that the ECB might consider slashing interest rates to help the faltering economy.

As a result, it was little surprise to see the euro losing 63 points versus the US dollar to trade at $1.3002.



Forex Trading: 23 April 2013

The euro-dollar pair traded within another tight range yesterday, ending just 8 points lower at $1.3065, as consumer confidence in the Eurozone surprised to the upside.

Although it is too early to interpret that as a sign of emergence out of recession, the report came as a breath of fresh air given the recent bailout in Cyprus and news of record unemployment.



Forex Trading: 22 April 2013

The European Central Bank President Mario Draghi gave a gloomy verdict on Friday, saying the Eurozone 'has not improved' in the past few weeks.

He signalled a potential cut in interest rates as well as employing a whole range of other measures in an attempt to stop the contraction and spur growth.

In forex spread betting, the euro rose to $1.3128 in the first part of the session but a late retracement cancelled off the initial gains.


By Jonathan Sudaria, 3 May 2013


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