EU on FIRE!!!

In times of turbulence and high volatility businesses and consumers' sentiment account for much, as their perception to the extent of imbalance let's say or deterioration, if seen as worse than current conditions, lead to an actual state of further damage in the future as they tend to now foreshadow their collaborative efforts to lead any economy to its doom.

The extent of downside effect the financial turbulence, US recession, and global growth slowdown is still to be measured upon the European Union; and as ECB's Trichet expressed is still within unusual high uncertainties. After steady rates in the euro zone the ECB remained hawkish and did not much project further slowing in economic growth, despite downgrading initial projection. Nevertheless since Germany withholds the highest portion in the 15 nations' GDP news are rather pleasant from there and form the entire euro boarders.

Euro Zone's single currency responded rather very well to today's ZEW sentiment indicators as they all came well above median estimates and improved in March, providing some sort of salvation to worried investors that the euro is now still on its upside journey as the sentiment is providing further resilience despite aching fears of this current rapid appreciation to the single currency that might be considered as an impediment for growth, yet seems that wont stop the Europeans at the time.

The euro managed to surge against the dollar at the time of the release as the euro set a fresh record at 1.5494 approaching $1.55, since the start of the European session the euro resisted its Asian trading range that was consolidating at low levels with downside bias, yet as the pair failed to progress below 1.5330s the downside correction for the day was canceled as the pair reclaimed the upside wave to set new targets after consolidating since yesterday to gather momentum.

Meanwhile on the British front, the CML housing loans data didn't do much to stop the pound from gaining yesterday's losses against the dollar, the data was rather discarded as it carried what markets saw overdue January figures which were already were canceled among the current strong sterling bullish sentiment. After the pound reached to as low as 2.0030s yesterday which resides near 100 days MA acquiring the pound with upside volume to reclaim the upside wave today to test the resistance level were the pound set it European high near 2.0210s and currently trades near 2.0180s.

The Japanese yen has lost its spark today as the equity markets revival works as always inversely with the yen. Japans currency weakened against majors today as the risk appetite has strengthened providing majors like the Euro and the Pound with more upside momentum as their gains were not just against the dollar, while the reclaim their losses against the yen and rise with strong volume. Against the dollar the yen has been falling taking the pair to the upside from the low opening levels at 101.40s to reach strong resistance levels as the pair could progress above 102.26. While against the Euro and Sterling the yens losses were more massive as the pairs rose to set their highs at the hour of this report of 155.57 and 203.58 respectively and are still on the rise.

In the US session we are waiting for January's trade balance data as the deficit is expected to widen despite the depreciation dollar, which of no surprise will be the result of surging oil prices. Imports have definitely slowed in the US as consumption and expenditure are slowing, while China's trade balance already gave us some hints, while as for exports that have been gaining on the back of a weak greenback seemingly didn't contribute as much as policy makers hoped in order to add to the final GDP, for we saw breadline slowing in the manufacturing sector and we noticed falling export orders. The previous assumed likelihood of strong export sector to salvage some growth in the US is not the case this first quarter. This still is adding to the ongoing sentiment which is definite more rate cuts in by the feds meaning further dollar selling!!!

Crown Forex

Posted in: Economy,Finance and Investment,Forex