euro sell-off is caused by two factors. First, it concerns Greece. The second is the expectation that already at the January meeting, the European Central Bank decides to run a program of buying government bonds (QE program). , photo:
In the currency market continues restatement euros. EUR / USD rate, which ended the previous week at $ 1.20, on the night of Sunday to Monday broke this barrier coming down below the 1.19 dollar. However, the euro is back above 1.19, the price reduction is hardly complete.
The two major causes weakening of the euro
Discount euros, except for the technical aspect of a typical, or execution of orders defensive stop loss is caused by two factors. First, it concerns Greece. The second is the expectation that already at the January meeting, the European Central Bank decides to run a program of buying government bonds (QE program).
The outlook for the euro for the year 2015, from 1.07 to 1.29 dollars .
ZR. Bloomberg / x-news
Germany promise: we accept the possibility of Greece from the eurozone
At the weekend the German press reported that the government of Chancellor Angela Merkel for the possibility of Greece in the euro zone. Such a scenario could be realized if the new Greek government that will emerge after the elections on 25 January, resigned from the continuation of reforms. A conductive in pre-election polls that directly SYRIZA promises. Of course, the Greek politicians before the election may say something different, and then continue with the reforms. Then the fear is over. But now investors are apprehensive.
Expert: After Greece could leave the euro zone Spain
Source: TVN24 Business and World / X-news
The European Central Bank will start in January QE?
Another reason for the sale of the common currency is the expectation that the ECB has at its meeting on January 22 to announce the purchase of government bonds (the QE). The probability of such a scenario is increasing with each weak data from the euro zone. Today can be made the next step in this direction. There are many indications that in December CPI inflation in December fell much more than expected to 0.4% from 0.6% y / y in November. These data will be published at 14:00.
The supply side pressure on the EUR / USD will remain until the third decade of January, when the ECB meeting is scheduled and parliamentary elections in Greece. There are few arguments for buying the single currency. Therefore it can be assumed that the EUR / USD in the coming weeks to remain below $ 1.20 and perhaps for months not come back over the barrier.
The weaker euro pull down gold
The decline in EUR / USD and deterioration in sentiment in global markets resulting in weakening of the zloty. He loses all major currencies. In this first of all to the dollar. USD / PLN broke out on Monday to 3.6145 zł, beating “Christmas” peak at 3.6085 zł. The US currency is currently the most expensive since March 2009. At that time, the euro have to pay 4.31 zł, and the Swiss franc costs a little less than 3,58 zł.
Business on the domestic foreign exchange market, due to the calendar system and a free day tomorrow, still held in a festive atmosphere. The market will return to normal activities sooner than Wednesday.
In the following days, sentiment, and thus the zloty, will not only shape the global markets, but also waiting for the results of the January meeting of the Monetary Policy Council. In this first of all speculation about the possibility of a reduction in interest rates by the Council. Since such speculation will intensify, so the appreciation of the zloty in January seems unlikely.
Martin Kiepas, Admiral Markets Branch in Poland, jk
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