Welcome!

News Feed Item

FXPRIMUS Market Brief of the Week: Where Is Euro Heading To In the Next 30 days?

SINGAPORE, SINGAPORE -- (Marketwired) -- 05/13/14 -- In FXPRIMUS' Market Brief of The Week for 12 May, the brokerage firm's Senior Economist, Jimmy Zhu, questions the state of Euro in the near future.

Economic Insights

Euro lower on ECB's pledge, Chinese stocks rallied on government to defend domestic equities expectation

Mario Draghi successfully talked down the euro in its monthly meeting, buy giving the strong signal that the central bank will act within the next 30 days. On the other hand, the 1-month ATM volatilities rose by 10% to 5.8625. The ECB welcomes the rising volatilities as it indicates the latest rebound since early April may be over.

EURUSD (white) vs. EURUSD 1-month ATM (green)

To view the figure accompanying this press release, please visit the following link:

http://media3.marketwire.com/docs/945040.jpg

As you can see the chart above, the euro-dollar hasn't ended the uptrend since the July last year. The recent rally was mainly due to the limited options the ECB can exercise to improve the subdued inflation. Even now, we do not expect much different after the Draghi's pledge last week. We mentioned a few possibility on the outcome of the next ECB meeting within 30 days last week, and it shows the "bazookas effect" was extremely low.

95% possibility of the coming ECB move next month - Cutting the benchmark lending rate to zero. But this is the least effective way to lift the inflation higher. The current lending rate at 0.25% has nearly no difference to zero, meaning another 25 bps cut will be a very symbolic move. Criticism will emerge again to argue the effectiveness of its objective, euro may go higher again.

40% possibility of the coming ECB move next month - Cutting the deposit rate to minus 0.25%. The possibility is higher now since Germany starts to backup more easing from the central bank. Increasing the defiance on those lenders could be one of the ways to discourage the institutions parking excess liquidity with the central bank. The single currency could test the 1.37 if this option is exercised.

10% possibility of the coming ECB move next month - Another round of Long-Term Refinancing Operation (LTRO). Previous LTROs aims to solve the liquidity problem and that isn't an issue now. Moreover, the effects of those previous LTROs have been less translated into the households and corporations; it will be the same again this time around.

Less than 5% possibility of the coming ECB move next month - Quantitative Easing. This is the most welcomed option but the chances for it to happen could be less than 5% based on the current environment. The main challenges are not from Germany at this moment, but it's the targeted market and feasibility. Asset-backed securities (ABS) and Mortgage-Backed Security (MBS) market are relatively small compared to the United States. Buying sovereigns in Core or Peripheral isn't the solution here as those bonds' yield spread has been widening to United States Treasury (UST). Besides that, what type of assets to buy and which countries to buy will be the next challenge.

EUR-USD 25 Delta 1-month reverse ratio currently stands at -0.5375, the level of -0.58 formed some support since Sep last year. It indicates the downside space might be capped at 1.3690. Before further action released by the ECB, euro-dollar could be reluctant to penetrate below this level.

China stocks rallied today, despite the momentum didn't transfer into the Aussie, led by commodity producers and financial companies, on speculation the government will take steps to bolster equities. Global policymakers' accommodative measure will encourage the investors to stay away with safe haven in the near term, USD-JPY might be benefited.

ABOUT FXPRIMUS

FXPRIMUS offers retail traders a level of trade execution, service quality and fund safety that are normally reserved only for the largest investors. Serving traders in 205 countries across 6 continents FXPRIMUS combines an unmatched level of fund safety with regular independent audits of company financials and Straight Through Processing, top notch execution with tight spreads, prompt and responsive customer support, ISO 27001 certification in Information Security, ISO 9001:2008 certification in Quality Management and an industry-leading trader toolset that includes free access to powerful trader tools. FXPRIMUS truly is The Safest Place To Trade.

Contacts:
FXPRIMUS Support
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
With more than 30 Kubernetes solutions in the marketplace, it's tempting to think Kubernetes and the vendor ecosystem has solved the problem of operationalizing containers at scale or of automatically managing the elasticity of the underlying infrastructure that these solutions need to be truly scalable. Far from it. There are at least six major pain points that companies experience when they try to deploy and run Kubernetes in their complex environments. In this presentation, the speaker will d...
While DevOps most critically and famously fosters collaboration, communication, and integration through cultural change, culture is more of an output than an input. In order to actively drive cultural evolution, organizations must make substantial organizational and process changes, and adopt new technologies, to encourage a DevOps culture. Moderated by Andi Mann, panelists discussed how to balance these three pillars of DevOps, where to focus attention (and resources), where organizations might...
The deluge of IoT sensor data collected from connected devices and the powerful AI required to make that data actionable are giving rise to a hybrid ecosystem in which cloud, on-prem and edge processes become interweaved. Attendees will learn how emerging composable infrastructure solutions deliver the adaptive architecture needed to manage this new data reality. Machine learning algorithms can better anticipate data storms and automate resources to support surges, including fully scalable GPU-c...
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Le...
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by ...
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
CI/CD is conceptually straightforward, yet often technically intricate to implement since it requires time and opportunities to develop intimate understanding on not only DevOps processes and operations, but likely product integrations with multiple platforms. This session intends to bridge the gap by offering an intense learning experience while witnessing the processes and operations to build from zero to a simple, yet functional CI/CD pipeline integrated with Jenkins, Github, Docker and Azure...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Dhiraj Sehgal works in Delphix's product and solution organization. His focus has been DevOps, DataOps, private cloud and datacenters customers, technologies and products. He has wealth of experience in cloud focused and virtualized technologies ranging from compute, networking to storage. He has spoken at Cloud Expo for last 3 years now in New York and Santa Clara.
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.
Containers and Kubernetes allow for code portability across on-premise VMs, bare metal, or multiple cloud provider environments. Yet, despite this portability promise, developers may include configuration and application definitions that constrain or even eliminate application portability. In this session we'll describe best practices for "configuration as code" in a Kubernetes environment. We will demonstrate how a properly constructed containerized app can be deployed to both Amazon and Azure ...
Poor data quality and analytics drive down business value. In fact, Gartner estimated that the average financial impact of poor data quality on organizations is $9.7 million per year. But bad data is much more than a cost center. By eroding trust in information, analytics and the business decisions based on these, it is a serious impediment to digital transformation.
Digital Transformation: Preparing Cloud & IoT Security for the Age of Artificial Intelligence. As automation and artificial intelligence (AI) power solution development and delivery, many businesses need to build backend cloud capabilities. Well-poised organizations, marketing smart devices with AI and BlockChain capabilities prepare to refine compliance and regulatory capabilities in 2018. Volumes of health, financial, technical and privacy data, along with tightening compliance requirements by...
Predicting the future has never been more challenging - not because of the lack of data but because of the flood of ungoverned and risk laden information. Microsoft states that 2.5 exabytes of data are created every day. Expectations and reliance on data are being pushed to the limits, as demands around hybrid options continue to grow.