28 Nov 2014
Deflation fears set the USD apart – TDS
FXStreet (Barcelona) - Analysts at TD Securities note that expected soft crude prices in the coming months have led to the release of weak inflation data in Japan and Eurozone today, this deflation concern for Eurozone along with Japan’s ‘reflation’ quest has made the USD stand out.
Key Quotes
“Crude oil has been unable to stage any significant bounce from the declines it sustained yesterday. Against this backdrop, and anticipating soft crude prices in the coming months, markets have had to contend with weak inflation data out of Japan and the Eurozone today.”
“Neither of them surprised expectations to a significant extent, but just the confirmation that Japan’s quest for reflation remains a magnificent challenge despite the BoJ having already fired most of its bullets while the Eurozone is stuck too close to the deflation line were enough to make the USD stand out.”
“EURUSD has bounced from its overnight lows now, although we doubt of its ability to break above 1.25 on the day. As we wrote yesterday, the ECB will likely keep up with the QE rhetoric next week, and this should be enough of a deterrent for the market to push the pair higher in the coming days.”
Key Quotes
“Crude oil has been unable to stage any significant bounce from the declines it sustained yesterday. Against this backdrop, and anticipating soft crude prices in the coming months, markets have had to contend with weak inflation data out of Japan and the Eurozone today.”
“Neither of them surprised expectations to a significant extent, but just the confirmation that Japan’s quest for reflation remains a magnificent challenge despite the BoJ having already fired most of its bullets while the Eurozone is stuck too close to the deflation line were enough to make the USD stand out.”
“EURUSD has bounced from its overnight lows now, although we doubt of its ability to break above 1.25 on the day. As we wrote yesterday, the ECB will likely keep up with the QE rhetoric next week, and this should be enough of a deterrent for the market to push the pair higher in the coming days.”