Euro Pressured ahead of ECB meeting. The single currency Euro seems depressed trading in a narrow range on Thursday (7/2) ahead of the monetary policy meeting of the European Central Bank (ECB) as investors are also wary of the leadership of the central bank's outlook - Mario Draghi, the strengthening of the Euro lately. Euro range in the area 1.3536 after falling to 1.3502 yesterday, while still closed yesterday at 1.3523 level. Throughout the year 2013, the euro has appreciate more than 10% against the yen and 2.5% against the U.S. dollar (USD).
Collapse of the Euro yesterday came after a poll showed the political coalition of former Prime Minister of Italy Silvio Berlusconi has made progress. So it raised concerns over the current economic reforms pursued by the government of Prime Minister Mario Monti. While the ECB had been widely expected to maintain the policy interest rate will not change (unchanged), and a number of analysts await Mario Draghi views on strengthening Euro and whether it will be an effect on the economic recovery in the region.
Euro sales drop ahead of ECB Policy Meeting
The U.S. dollar fell versus the euro as traders increasingly cautious ahead of the European Central Bank meeting Thursday. The ECB is expected to keep interest rates unchanged. However, the focus of market players remained fixed to the press conference ECB President Mario Draghi, who is expected to avoid commenting about the high euro exchange rate at the moment and prefer to elevate the conversation about improving prospects in the region are still many problems to overcome.
"The market continues to speculate about the statement and press conference Draghi ECB," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "The president Draghi will likely voiced caution and as a result the euro will weaken."
EURJPY Detained Ahead of ECB Under 127
EURJPY is currently trading down 126.48 points, down by 0.61% from the previous session of Asia Pacific, most of the related weakening Euro, Euro as traders booked profits ahead of ECB policy meeting, said Managing Director BKAsset Management, Kathy Lien. Japan's machinery orders data to be released positive, rising 2.8% by the base monthly, put pressure on the yen buying, was last seen at 93.43, near the session low.
"Price (EURJPY) back down 127.00", says founder FXWW, Sean Lee, who would have little concern for the movement up the signal, but it is still favorable. The level of price volatility should persist for highly in the range of 124/127 for now, analysts said. Support close to EURJPY were low yesterday at 125.90 points, followed by Tuesday's U.S. session low at 125.72 points, and the U.S. session low at 124.82 on Friday. In order to increase the movement, resistance is high close session at 126.66 points, followed by the high on Friday at 126.97, and the annual high for at 127.71 points.
Profit-taking Leads Nikkei Close Negative
Nikkei - Japan finally closed down -0.93% or decreased by -106.68 points at 11357.07 mainly due to profit-taking after the index on the session yesterday soared to the highest level in 4 years. Japanese Prime Minister Shinzo Abe today refuted the view that monetary policy alone can not overcome the problem of long-running deflation in Japan because Japan's population decline. The comments are likely to keep pressing the Bank of Japan to pump more money into the economy.
From the technical side, the trend in the Nikkei daily scale are revealed still bullish, but for the duration per 1 hour, Nikkei seen will be corrected first. Some key indicators such as Stochastic and MACD is bearish confirmed. So that it will contribute to the drag resistance movement Nikkei support 11 320 (23.6% Fibonacci retrace) and 11 265 and 11 205 (38.2% Fibonacci retrace). While the Nikkei today appeared to be difficult to continue the rally, but at least the index is still likely to target resistance then 11 450 11 400 or even up to 11 505.
Japanese Vice Minister of Finance : Our Main Target Preventing Deflation
Japan's vice finance minister speaking today at a seminar held by the International Monetary Fund (IMF). In a statement, Takehiko Nakao said that the main purpose of this ministry is to stop deflation now. The whole range is government ready to carry out the mandate of the achievement of the inflation target of 2% was requested by Prime Minister Shinzo Abe. "So far all goes according to plan policy," he said when the review about the rise in stock prices and a decline in the exchange rate of yen.
Nakao also highlighted climate long-term interest rates are still very low. Deflation during the last two decades has triggered acute damage in the Japanese economic system, especially regarding price reductions and income residents. Investment flows are also reduced, in line with the lack of household consumption. According to Nakao, interest rates can not be lowered again and the sales figures could continue to fall in the middle of deflation climate. If so, then the government's increasingly difficult to pay its debt load.
"Japan has experienced sustained deflation over the past two decades, and it's very damaging," he said. Nakao assess the real interest rate is very high when compared to the ideal level should be. Society tends to reduce consumption in the climate of deflation in the hope prices become cheaper. Even so, Nakao see any risk if governments rely on cheap credit and fiscal stimulus. "We have to look at the fiscal performance if you do not want to lose credibility," Nakao lid.
Collapse of the Euro yesterday came after a poll showed the political coalition of former Prime Minister of Italy Silvio Berlusconi has made progress. So it raised concerns over the current economic reforms pursued by the government of Prime Minister Mario Monti. While the ECB had been widely expected to maintain the policy interest rate will not change (unchanged), and a number of analysts await Mario Draghi views on strengthening Euro and whether it will be an effect on the economic recovery in the region.
Euro sales drop ahead of ECB Policy Meeting
The U.S. dollar fell versus the euro as traders increasingly cautious ahead of the European Central Bank meeting Thursday. The ECB is expected to keep interest rates unchanged. However, the focus of market players remained fixed to the press conference ECB President Mario Draghi, who is expected to avoid commenting about the high euro exchange rate at the moment and prefer to elevate the conversation about improving prospects in the region are still many problems to overcome.
"The market continues to speculate about the statement and press conference Draghi ECB," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "The president Draghi will likely voiced caution and as a result the euro will weaken."
EURJPY Detained Ahead of ECB Under 127
EURJPY is currently trading down 126.48 points, down by 0.61% from the previous session of Asia Pacific, most of the related weakening Euro, Euro as traders booked profits ahead of ECB policy meeting, said Managing Director BKAsset Management, Kathy Lien. Japan's machinery orders data to be released positive, rising 2.8% by the base monthly, put pressure on the yen buying, was last seen at 93.43, near the session low.
"Price (EURJPY) back down 127.00", says founder FXWW, Sean Lee, who would have little concern for the movement up the signal, but it is still favorable. The level of price volatility should persist for highly in the range of 124/127 for now, analysts said. Support close to EURJPY were low yesterday at 125.90 points, followed by Tuesday's U.S. session low at 125.72 points, and the U.S. session low at 124.82 on Friday. In order to increase the movement, resistance is high close session at 126.66 points, followed by the high on Friday at 126.97, and the annual high for at 127.71 points.
Profit-taking Leads Nikkei Close Negative
Nikkei - Japan finally closed down -0.93% or decreased by -106.68 points at 11357.07 mainly due to profit-taking after the index on the session yesterday soared to the highest level in 4 years. Japanese Prime Minister Shinzo Abe today refuted the view that monetary policy alone can not overcome the problem of long-running deflation in Japan because Japan's population decline. The comments are likely to keep pressing the Bank of Japan to pump more money into the economy.
From the technical side, the trend in the Nikkei daily scale are revealed still bullish, but for the duration per 1 hour, Nikkei seen will be corrected first. Some key indicators such as Stochastic and MACD is bearish confirmed. So that it will contribute to the drag resistance movement Nikkei support 11 320 (23.6% Fibonacci retrace) and 11 265 and 11 205 (38.2% Fibonacci retrace). While the Nikkei today appeared to be difficult to continue the rally, but at least the index is still likely to target resistance then 11 450 11 400 or even up to 11 505.
Japanese Vice Minister of Finance : Our Main Target Preventing Deflation
Japan's vice finance minister speaking today at a seminar held by the International Monetary Fund (IMF). In a statement, Takehiko Nakao said that the main purpose of this ministry is to stop deflation now. The whole range is government ready to carry out the mandate of the achievement of the inflation target of 2% was requested by Prime Minister Shinzo Abe. "So far all goes according to plan policy," he said when the review about the rise in stock prices and a decline in the exchange rate of yen.
Nakao also highlighted climate long-term interest rates are still very low. Deflation during the last two decades has triggered acute damage in the Japanese economic system, especially regarding price reductions and income residents. Investment flows are also reduced, in line with the lack of household consumption. According to Nakao, interest rates can not be lowered again and the sales figures could continue to fall in the middle of deflation climate. If so, then the government's increasingly difficult to pay its debt load.
"Japan has experienced sustained deflation over the past two decades, and it's very damaging," he said. Nakao assess the real interest rate is very high when compared to the ideal level should be. Society tends to reduce consumption in the climate of deflation in the hope prices become cheaper. Even so, Nakao see any risk if governments rely on cheap credit and fiscal stimulus. "We have to look at the fiscal performance if you do not want to lose credibility," Nakao lid.
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