Forex Crunch » interest rate

5 Reasons Not To Cut Rates – ECB Preview

Yohay — Thu, 09 Feb 2012 09:11:55 +0000

Those expecting a third rate cut from Draghi might be disappointed. The ECB will likely repeat the “business as usual” stance that worked so well last month.

There are 5 reasons for the ECB to wait and see for another month.

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Conveying a Message of “Business as Usual”? ECB Preview

Yohay — Thu, 12 Jan 2012 08:23:12 +0000

The first rate decision of the ECB for 2012 will likely not consist of any new unconventional measures nor rate cuts. This comes as the chances of a Greek default are rising, together with distrust among banks.

Will Draghi surprise with a bigger move? Probably not, and this may be painful for the single currency. ECB Preview. Follow the press conference at the live blog.

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ECB Cuts Rates by 0.25% to 1%

Yohay — Thu, 08 Dec 2011 12:45:29 +0000

The European Central Bank cut its benchmark Minimum Bid Rate by 0.25% to 1%, as expected. The new president of the ECB, Mario Draghi, fully reversed the rate hikes made by his predecessor Jean-Claude Trichet earlier in the year.

EUR/USD traded just above 1.3380 before the release, at the lower end of the 1.3360 and 1.3420 lines. EUR/USD moves up to 1.34.

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Australian Dollar Recovers From Rate Cut

Yohay — Tue, 06 Dec 2011 11:28:30 +0000

The RBA cut the interest rate in Australia by 0.25% to 4.25%, in a move that was widely expected. This is the second cut in a row. Glenn Stevens and his colleagues cut the rates from 4.75% to 4.50% on November 1st.

The Aussie took a dive following this move, but it found support and bounced back up. Update.

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Draghi: Risks Have Materialized – EUR/USD Extends Drops

Yohay — Thu, 03 Nov 2011 13:22:07 +0000

In his first press conference as the president of the ECB, Mario Draghi explains the decision to cut the interest rate from 1.50% to 1.25% and describes the risks to growth as “materializing”. EUR/USD reacts with a extended drops on the worrying tone of Draghi.

EUR/USD is already at support at 1.3725 and threatens to break lower. Update: this line is lost after Draghi says that Europe is headed towards a mild recession by year end.

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ECB Supplies Market Liquidity, Limited Market Intervention – EUR/USD Falls

Yohay — Thu, 04 Aug 2011 12:15:46 +0000

Jean-Claude Trichet said that the ECB is “monitoring very closely”, but immediately announced an LTRO plan to supply liquidity – pushing money to the markets. The ECB intervened in the markets, but at a very limited scale, apparently without touching Spanish and Italian bonds.

The best show in town for euro traders ended with a lower euro, and higher uncertainty. Here is a wrap up of the live blog.

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Stepping Back From The Monitors? ECB Preview

Yohay — Wed, 03 Aug 2011 11:37:02 +0000

Jean-Claude Trichet will have his monthly rendezvous with the press after the rate decision, and is likely to be softer this time. How will the euro react to Trichet’s words? ECB Preview with four scenarios – one is already priced in.

On Thursday at 11:45 GMT, the ECB is expected to leave the interest rates unchanged after the 0.25% hike last month to 1.50%. Trichet didn’t say “strong vigilance” last time, so no hike is likely now. But what will he say now?

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NZD/USD Should Get More Attention

Yohay — Mon, 18 Jul 2011 17:38:56 +0000

The New Zealand dollar / US dollar usually ends lists of currency pairs, and is sometimes just left out of them. The currency is just above the “exotic” grade, enjoys a few positive characteristics, and should gain more attention from currency traders. Here are 5 reasons why.

With a population of less than 4.5 million people, GDP ranked 62nd in the world and a location which seems to be the end of the world, no wonder that the kiwi remains hidden from the eye. The developed economy and free floating currency did help it reach the “minors” and “commodity currencies” lists, but it deserves more.

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Is Trichet Bold Enough to Change His Mind?

Yohay — Wed, 06 Jul 2011 14:58:37 +0000

At this time three years ago, Trichet raised the rates just before the global financial system collapsed. He found himself slashing the rates quickly afterwards. It’s not only a fresh round of the debt crisis that poses a risk. There are many signs of a slowdown at the euro-zone’s strongest countries and all over the world.

Will Trichet keep remain credible at a very high cost? Or will he bold enough to change his mind? If so, it will be a blow to the euro, as this isn’t priced in the markets.

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EUR/USD Falls as Trichet Signals Further Pause and Warns About Exchange Rate

Yohay — Thu, 05 May 2011 12:31:43 +0000

ECB President Jean-Claude Trichet didn’t use the code words “strong vigilance”, but used “monitor very closely” instead. So, we expect another pause in rate hikes next month. This comes as the interest rate was left unchanged at 1.25%. EUR/USD now drops and is dropping below support. The falls are accelerated after Trichet quotes in full the commitments of American policymakers for a strong dollar. This is part of ECB’s considerations.

The ECB press conference has ended. Highlights:

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