ECB to Purchase More Assets ECB President Mario Draghi hinted that the central bank may purchase more assets in order to avert deflation. Draghi said that the ECB is unanimous in its commitment to using additional unconventional instruments within its mandate” and added that this would imply altering early next year the size, pace and composition of our measures.” Draghi echoed ECB Executive Board member Peter Praet, who stated that in the case of negative demand shocks, monetary policy should provide additional accommodation.” The central bank decided to reduce its interest rate to 0.05% as inflation stands at 0.3% and the unemployment rate reached 11.5%. Further rate cuts may weaken the euro relative to the dollar. The EUR/USD reached its highest level (1.2494) since December 1 last week. According to PwC, the Eurozone economy will expand by 0.8% this year. In the U.S., the Bureau of Labor Statistics announced that the Producer Price Index (MoM) fell to -0.2% in November. The index, which measures the change in the price of goods sold by manufacturers, came lower than the expected -0.1%. Following this development, the EUR/USD rose to 1.2484. This benefited traders who placed long positions at the start of Friday’s session. UPCOMING EVENTS 2014-12-15 11:00 GMT United Kingdom, CBI Industrial Trends Orders 2014-12-15 13:30 GMT United States, NY Empire State Manufacturing Index 2014-12-15 14:15 GMT United States, Industrial Production (MoM) EUR/USD EUR/USD is traded at 1.2434 ahead of the NY Empire State Manufacturing Index. The index, which rates the general business conditions in the state of New York, is expected to stand at 12.52. A higher than expected reading would be bullish for the dollar and may weaken the currency pair. Our intraday recommendation Sell the pair below 1.2454 towards 1.2434 & 1.2414. Above 1.2454 buy towards 1.2474 & 1.2494. GBP/USD GBP/USD is traded at 1.5720 as traders await the CBI Industrial Trends Orders. The figure, which measures the economic expectations of manufacturing executives in the U.K., is expected to stand at 3. A higher than expected reading would be bullish for the pound and may strengthen the currency pair. Our intraday recommendation Sell the pair below 1.5738 towards 1.5718 & 1.5698. Above 1.5738 buy towards 1.5758 & 1.5778. USD/JPY USD/JPY is traded at 118.42 as traders await the NAHB Housing Market Index. The index, which rates the level of current and future home sales, is expected to stand at 58. A higher than expected reading would be bullish for the dollar and may strengthen the currency pair. Our intraday recommendation Buy the pair above 118.32 towards 118.69 & 119.05. Below 118.32 sell towards 117.96 & 117.59. AUD/USD AUD/USD is traded at 0.8241 ahead of the Capacity Utilization Rate. The rate, which measures the percentage of production capacity being utilized in the U.S., is expected to stand at 79.3%. A higher than expected reading would be bullish for the U.S. dollar and may weaken the currency pair. Our intraday recommendation Sell the pair below 0.8248 towards 0.8226 & 0.8202. Above 0.8248 buy towards 0.8272 & 0.8296. Oil Oil is traded at 58.36 as traders await the U.S. Industrial Production (MoM). The figure, which measures the change in the value of output produced by manufacturers, is expected to stand at 0.7%. A higher than expected reading would have a bullish effect on oil prices. Our intraday recommendation Buy the commodity above 58.57 towards 59.88 & 61.10. Below 58.57 sell towards 57.42 & 56.27.
Posted on: Mon, 15 Dec 2014 17:29:13 +0000
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