EUR/USD just avoided stepping on a banana skin

Author: Eamonn Sheridan | Category: News

A really quick preview of the European Central Bank and a few other bits and bobs from HSBC

On Friday, HSBC noted:
  • The EUR is pushing higher against the USD this morning with no ECB speakers to distract and German politics not yet a hindrance
They remark on the ECB:
  • The push above 1.20 in EUR/USD had seen the ECB step up its rhetoric reminding markets that a strong currency would have a dampening effect on inflation and warranted monitoring.
But when there are no ECB speakers on deck:
  •  leaving the EUR uninhibited.
On the upcoming meeting this week (Thursday):
  • A Bloomberg survey ... shows 50% of respondents expect the ECB to announce a formal end date for QE at its June meeting (compared to 38% last month) reflects the hawkish shift in market expectations.
On German politics the bank had warned of a
  • "potential modest banana skin lies in wait for EUR bears over the weekend on the political front. Germany's SPD will hold a conference to vote whether the party should enter formal negotiations with the CDU/CSU to form a grand coalition. The EUR rallied recently in response to signs that a coalition was a step closer"
As we know, the coalition talks took another step forward: Germany's Social Democrats back formal coalition talks with Chancellor Merkel  

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose