Following a week where a global movement toward risk-aversion helped the dollar push the euro lower, the continental currency plummeted to its lowest valley since the 2nd week of July 2010, the euro was further propelled by the incidental comments of an ECB official that were published by the media fueling liquidity issues in the markets on the idea that the global economy is faltering. Axel Weber, an ECB council member, was quoted in a Bloomberg article as saying that it would be prudent for the ECB to continue to extend unlimited liquidity to European banks past this year.
Because of this growing sentiment, the greenback should be ready to keep gaining on the euro next week as the belief that the world’s economy is stalling should augment the dollars’ safe-haven appeal to investors. There is a prevailing current fear in the bonds market that a second recessionary fall (also known as a double-dip recession) could be approaching, and with the end of the summer approaching, and markets anxiously awaiting the US growth data next week, most investors will not be looking to hold an investment that is betting against it. “It’s all moving in the same direction,” said Ian Stannard, senior currency strategist at BNP Paribas. “The situation is turning to one where weak US data is becoming a positive for the dollar as a US slowdown is seen affecting a broader global economic recovery”.
Traders, experienced and otherwise, who look for current EUR/USD macro-econ news will find this type of information crucial to their decision making process. Several FX websites post daily FX commentary. If this type of information is important to you, you are a novice trader, are interested in excellent FX coverage, or even want to start doing FX Trading, you can learn lots about all of these topics by taking a webinar at http://www.igmarkets.com/fx/seminars.html.
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