The big focus tomorrow is on ECB President Trichet’s press conference. The European Central Bank is not expected to raise interest rates, but Trichet IS expected to pave the for a rate hike in July. Over the past few years, the words “Strong Vigilance” have been synonymous with “interest rates will be increased next [...]

Posted in 2011 euro forecast, ECB, ecb rate hike, eur/usd No Comments »

- Rates currently at 1.00%
- 25bp rate hike completely priced in for Thurs
- 50bp priced in by June
- 100bp priced in by end of year
The most anticipated event risk this week is the ECB’s monetary policy decision on Thursday and the euro has rallied strongly ahead of the announcement. For the first time in 2 [...]

Posted in ECB, ecb rate hike, eur/usd 4 Comments »

The following chart shows how the EUR/USD traded after the G7 joint intervention in Sept 2000. The EUR/USD made a new low and the ECB followed up with more intervention a month later which finally carved out the bottom. Will USD/JPY behave the same way?

Posted in 2010 eurusd forecast, 2010 eurusd forecasts, Euro Intervention, eur/usd, euro No Comments »

Over the past 3 weeks, central banks around the world have made a number of comments that have affected rate hike expectations. On Jan 27th, I showed where rate hike expectations were at the time and since then a number of interesting changes have occurred.
First, the market is now pricing in a 25bp rate [...]

Posted in 2009 british pound forecast, 2010 dollar forecast, Australian Dollar, Bank of Canada, Bank of England, British Pound, Canadian Dollar, ECB, Fed rate hike, Federal Reserve, eur/usd 2 Comments »

I was on CNBC last night talking about the outlook for the euro. Here’s the video:

Posted in 2011 euro forecast, Forex, Forex TV, eur/usd, forex blog No Comments »