Forex Update 8 February 2013

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Financial Spreads: Spread Betting and CFD Trading

Forex Trading: 08 February 2013

The ECB left its benchmark interest rate unchanged yesterday, but it was President Mario Draghi's concerns over a strengthening euro that spooked the global markets.

Although the jury is still out on whether the common currency is fairly valued against the dollar, market reaction was one of shoot first and ask questions later.

Consequently, the euro tumbled 124 points to $1.3398 and, so far this morning, is not bouncing as much as the FTSE, with the euro-dollar market currently at $1.3405.

Also see today's feature Are We Seeing an Escalation of Currency War?

Forex Trading: 07 February 2013

Amid political rows in Italy and Spain, the euro-dollar forex market came under pressure yesterday, losing 56 points to close at $1.3521.

In addition, Greece's banking system is under scrutiny again after comments by the Greek finance minister pointed towards its weakness.

As a result, Mario Draghi & Co will have plenty to discuss during the ECB interest rate meeting which kicks off later today.

Forex Trading: 06 February 2013

Ahead of tomorrow's European Central Bank interest rate meeting, the shared currency resumed its rally against the dollar, climbing 65 points to $1.3577.

Many fear that, as French President Hollande has suggested, a higher euro could dampen the European economic recovery.

However, it seems that ECB officials are not too worried about the possible negative consequences and are rather content with the current level.

At the time of writing, the EUR/USD pair is trading at $1.3535.

Forex Trading: 05 February 2013

In the forex markets, the political risk in Spain, where the Prime Minister stands accused of illegal cash payments, and Italy, ahead of the fast approaching general election, showed how thin the recent optimism actually was.

Financial spread trading investors did not think twice and rushed straight into the dollar, dragging the euro 139 points lower to $1.3512, with the pair slipping even further overnight.

Nevertheless, the buyers are back this morning, pushing EUR/USD to $1.3510 at the time of writing.

Forex spread traders should bear in mind that the European Central Bank will announce its benchmark interest rate decision on Thursday, which will be followed by the usual Press Conference.

Forex Trading: 04 February 2013

Risk appetite was boosted on Friday by a stronger US job sector and a reassurance from the Federal Reserve that it will continue to pump money into its economy.

Benefiting from the news, the common currency went on to reach above the $1.3700 level.

The euro-dollar spread trading market did pull back slightly towards the close, but still settled 77 points higher at $1.3654.

Adding to the general optimism regarding the common area, the decline in the ECB's balance sheet is another bullish feature for the euro.

Forex Trading: 01 February 2013

A surprise decline in German unemployment fuelled renewed hopes that the worst is over for the German economy, which is now gathering momentum in its recovery.

That pushed the euro higher against the dollar, with the pair ending the day 14 points up at $1.3577.

At the time of writing, the shared currency has broken above the $1.3600 mark, but the focus will undoubtedly shift across the Atlantic when the US employment figures are released.

Forex Trading: 31 January 2013

The Spanish economy has plunged deeper into recession, with yesterday's report indicating a decline of 0.7% in GDP, against estimates for a 0.6% fall.

However, investors paid more attention to a separate report which showed a higher level of economic confidence in the Eurozone.

That resilient optimism in the face of ongoing problems in Spain pushed the euro above the $1.35 mark for first time since 2011, with the EUR/USD rate closing 73 points higher at $1.3563.

The single currency had headed higher earlier on but this morning's risk aversion is reining it in, dragging the pair slightly lower to $1.3555.

Forex Trading: 30 January 2013

Yesterday's optimism regarding the US economy spilled over to this side of the Atlantic, with CFD investors leaving the safety of the dollar and heading into riskier currencies instead.

As a result, the euro climbed 36 points to $1.3490 and then, keeping the uptrend intact, managed to move above $1.3500, where it has remained despite the weak Spanish GDP numbers.

Forex Trading: 29 January 2013

In the currency markets, Eurozone unemployment will be high on the agenda this week as it is expected to move up to 11.9%, a record since the beginning of the common project.

It's too early to say whether confirmation of this would limit the bullish momentum for the euro, but the EUR/USD pair did stop for a breather yesterday, closing 11 points lower at $1.3453.

Forex Trading: 28 January 2013

In forex spread trading, better-than-expected German investor confidence figures pushed the euro 87 points higher against the US dollar on Friday, with the pair rising to $1.3459.

Although the tone at the World Economic Forum in Davos was somewhat cautious, with many still pointing to ongoing structural problems in Europe, it seems investors are currently more interested in a short-term outlook.

By Simon Denham, 8 February 2013

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