6 Mar 2014
EUR/AUD dumps a big figure
FXStreet (Guatemala) - EUR/AUD has extended the downside from 1.5460’s descending trend line and is currently testing demand on 1.5200/10.
EUR/AUD dumped a big figure after the upbeat data and Australian retail sales s.a.(MoM) for January came in much better that expected at +1.2% vs +0.5% expected and +0.5% prior. While traders can now be assured that the RBA will use this as an excuse to remain neutral for the time being, we turn our attention over to the ECB. Sean Callow at Westpac Banking Corporation ABN explained after modestly encouraging data over the month, including GDP, PMIs and CPI, the ECB seems likely to keep its main policy settings on hold at today’s meeting. “However, in recent days there has been talk that the ECB will boost liquidity by ending the sterilization of the EUR175bn in EZ bonds (Greece etc) bought in 2010-12 before the program was ended, replaced by the OMT bond backstop. This could be justified by the balance sheet shrinkage caused by the repayment of LTRO loans, rather than by any particular pessimism in the quarterly staff forecasts due at this meeting. Confirmation of this step should inflict at least some damage on EUR but Draghi’s tone at the press conference will be pivotal”.
EUR/AUD dumped a big figure after the upbeat data and Australian retail sales s.a.(MoM) for January came in much better that expected at +1.2% vs +0.5% expected and +0.5% prior. While traders can now be assured that the RBA will use this as an excuse to remain neutral for the time being, we turn our attention over to the ECB. Sean Callow at Westpac Banking Corporation ABN explained after modestly encouraging data over the month, including GDP, PMIs and CPI, the ECB seems likely to keep its main policy settings on hold at today’s meeting. “However, in recent days there has been talk that the ECB will boost liquidity by ending the sterilization of the EUR175bn in EZ bonds (Greece etc) bought in 2010-12 before the program was ended, replaced by the OMT bond backstop. This could be justified by the balance sheet shrinkage caused by the repayment of LTRO loans, rather than by any particular pessimism in the quarterly staff forecasts due at this meeting. Confirmation of this step should inflict at least some damage on EUR but Draghi’s tone at the press conference will be pivotal”.