Forex4you - Analytics

    Forex4you

    579.00 6.50/10
    60% of positive reviews
    Real

    Euro rises on Greek hopes after Varoufakis demoted from chief negotiator spot

    EUR

    The euro rose on Monday on hopes of a breakthrough in Greek bailout negotiations after Prime Minister Tsipras reshuffled the negotiation team, demoting the antagonistic Finance Minister Varoufakis and replacing him with the Foreign Minister, Tsakalotas, a softly spoken, Oxford educated economist who is preferred by international creditors.

    The changes probably came after Greece’s Finmin was criticised during negotiations with the euro-group in Riga, Latvia on Friday, where there was much verbal fireworks without any progress on a deal. There have been reports creditors have become so exasperated with Varoufakis they have tried to by-pass him, but this will not be necessary now he has been taken off the job.

    ECB’s Constancio chipped in with positive talk, saying that he had faith Greece would reach a deal and that the recovery in the euro-zone was firming.

    On the data front, figures released from the ECB showed the QE programme still expanding the balance-sheet at the required rate, with 11.2bn added last week, bringing total asset purchases since programme began in March to 85.01bn.

    USD

    The dollar started to weaken on Monday after the release of Services sector data showed an unexpected slow-down to 57.8 from 59.2 previously, in a preliminary estimate for April.

    Analysts had been expecting a drop, but not as much as the real figure, rather only to 58.8.

    Composite PMI also fell to 57.4 from 59.2.

    Dallas Fed Manufacturing eased up a little, coming out at -16.0 from -17.4 previously, but this was not as good a recovery as the -12.0 forecast.

    The data confirmed the slightly negative trend in economic data from the U.S, which has started to erode confidence in expectations the Fed will hike rates mid-year, introducing some doubt that the economy will be ready for such a hike.

    GBP

    The pound ignored lacklustre data and an influential poll showing the Conservatives nudging into a 6 point lead and actually continued rising on Monday -partly in dollar weakness – but also as the outlook for Europe and Greek bailout negotiations helped give a leg-up to the outlook for the U.K economy due to the two being so interdependent.

    The ‘Ashcroft’ opinion poll showed the Conservatives taking 36% of the vote versus 30% for Labour, a substantial lead for the first time so far. Despite this boding ill for Britain’s relationship with the E.U sterling appreciated on Monday.

    On the data front the Consortium of British Industry released figures showing across the board falls, with Business Optimism falling to 3 from 15 in April when a rise to 19 had been expected, Total Orders at -3 from 4 previously when 2 was forecast and only Total Orders gaining – and only a paltry 1 from 0 before, when analysts had estimated a stronger recovery to 4.

    JPY

    The yen traded flat from Friday’s close, fluctuating in the 118.900’s for most of Monday.

    Many traders are waiting for results of the upcoming deliberations of Bank of Japan’s policy committee. Analysts are expecting to see further stimulus from the BOJ which will give equities more fuel, but weigh on the yen.

    Credit Suisse strategist Andrew Garthwaite believes the most likely outcome is that the central bank will expand its asset purchase programme to include items such as foreign bonds, exchange traded funds and asset backed securities.

    However the BOJ is expected to trim back its inflation forecast for 2015, by several tenths of a percentage point from 1.0% and shave its growth forecast from the current 2.1%.Despite inflation dropping back to zero Governor Kuroda insists the existing QE programme is on track leading economists to think further easing has been shelved for now.

    Looking forward investors will be eager to monitor Japan’s retail trade data scheduled for release overnight.

    EUR

    The euro rose on Monday on hopes of a breakthrough in Greek bailout negotiations after Prime Minister Tsipras reshuffled the negotiation team, demoting the antagonistic Finance Minister Varoufakis and replacing him with the Foreign Minister, Tsakalotas, a softly spoken, Oxford educated economist who is preferred by international creditors.

    The changes probably came after Greece’s Finmin was criticised during negotiations with the euro-group in Riga, Latvia on Friday, where there was much verbal fireworks without any progress on a deal. There have been reports creditors have become so exasperated with Varoufakis they have tried to by-pass him, but this will not be necessary now he has been taken off the job.

    ECB’s Constancio chipped in with positive talk, saying that he had faith Greece would reach a deal and that the recovery in the euro-zone was firming.

    On the data front, figures released from the ECB showed the QE programme still expanding the balance-sheet at the required rate, with 11.2bn added last week, bringing total asset purchases since programme began in March to 85.01bn.

    USD

    The dollar started to weaken on Monday after the release of Services sector data showed an unexpected slow-down to 57.8 from 59.2 previously, in a preliminary estimate for April.

    Analysts had been expecting a drop, but not as much as the real figure, rather only to 58.8.

    Composite PMI also fell to 57.4 from 59.2.

    Dallas Fed Manufacturing eased up a little, coming out at -16.0 from -17.4 previously, but this was not as good a recovery as the -12.0 forecast.

    The data confirmed the slightly negative trend in economic data from the U.S, which has started to erode confidence in expectations the Fed will hike rates mid-year, introducing some doubt that the economy will be ready for such a hike.

    GBP

    The pound ignored lacklustre data and an influential poll showing the Conservatives nudging into a 6 point lead and actually continued rising on Monday -partly in dollar weakness – but also as the outlook for Europe and Greek bailout negotiations helped give a leg-up to the outlook for the U.K economy due to the two being so interdependent.

    The ‘Ashcroft’ opinion poll showed the Conservatives taking 36% of the vote versus 30% for Labour, a substantial lead for the first time so far. Despite this boding ill for Britain’s relationship with the E.U sterling appreciated on Monday.

    On the data front the Consortium of British Industry released figures showing across the board falls, with Business Optimism falling to 3 from 15 in April when a rise to 19 had been expected, Total Orders at -3 from 4 previously when 2 was forecast and only Total Orders gaining – and only a paltry 1 from 0 before, when analysts had estimated a stronger recovery to 4.

    JPY

    The yen traded flat from Friday’s close, fluctuating in the 118.900’s for most of Monday.

    Many traders are waiting for results of the upcoming deliberations of Bank of Japan’s policy committee. Analysts are expecting to see further stimulus from the BOJ which will give equities more fuel, but weigh on the yen.

    Credit Suisse strategist Andrew Garthwaite believes the most likely outcome is that the central bank will expand its asset purchase programme to include items such as foreign bonds, exchange traded funds and asset backed securities.

    However the BOJ is expected to trim back its inflation forecast for 2015, by several tenths of a percentage point from 1.0% and shave its growth forecast from the current 2.1%.Despite inflation dropping back to zero Governor Kuroda insists the existing QE programme is on track leading economists to think further easing has been shelved for now.

    Looking forward investors will be eager to monitor Japan’s retail trade data scheduled for release overnight.


    To leave a comment you must or Join us


    By visiting our website and services, you agree to the conditions of use of cookies. Learn more
    I agree