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Forex: EUR/USD could very-well lose 1.30 post ECB - DailyFX

By FXstreet.com,  May 02, 2012, 05:33:00 PM EDT

FXstreet.com (Barcelona) - EUR/USD pressed into fresh cycle lows falling as low as 1.3121 before a mild bounce sent the spot rate just above 1.3150 at the NY close. Weak EZ PMIs weighed on risk appetite, causing EZ stocks to plunge.

All the attention is now shifted towards ECB's President Mr. Draghi after today's PMIs. There has been rumours doing the round that the ECB - due to update monetary policy tomorrow at 11.45GMT (rate call) and 12.30GMT (Draghi speech) - is planning a third 3-yr LTRO following today's weakened data.

To make the collection of negative news even worse, the Euro-zone's jobless rate hit a 15-year high Wednesday, as fears grow that even the German labor market conditions are worsening.

According to Christopher Vecchio, Currency Analyst at DailyFX, "today's Euro's decline could have been worse given the dismal data, however hope remains that the ECB will unveil new measures to help fight the crisis tomorrow, although I remain very doubtful that this will occur."

"I expect that President Draghi will hold his current course and give further signals that the burden of keeping the Euro-zone together falls on governments, not the ECB; and the Euro could very-well fall below the crucial 1.30 level following the policy meeting" Mr. Vecchio adds.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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