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6 Jan 2015
EUR falls below 1.19 levels as markets position for a negative CPI print – Scotiabank
FXStreet (Barcelona) - Camilla Sutton CFA, CMT, Chief FX Strategist at Scotiabank, explains that EUR fell below the 1.1900 handle as markets gear up for an expected negative CPI print for EUR, anticipating it show a drop of -0.1%yoy.
Key Quotes
“EUR is weak, trading back below 1.1900 and having lost 0.4% since yesterday’s close.”
“For EUR the key release is tomorrow’s flash CPI, which is expected to show a drop of –0.1%y/y, officially pushing the Eurozone into deflation.”
“Yesterday’s weak print from Germany helped to spur worries over pricing pressure and the potential response by the ECB at their January 22nd meeting.”
“The Eurozone services PMIs were weaker than expected, however the core themes for EUR are: 1) low growth and low inflation; 2) the potential ECB response; 3) negative rates encouraging outlows; 4) FX reserve managers diversifying away from EUR; 5) all juxtaposed against the strong US backdrop.”
“The near-term risks are: tomorrow’s CPI print, the January 22nd ECB meeting and the January 28th Fed meeting.”
Key Quotes
“EUR is weak, trading back below 1.1900 and having lost 0.4% since yesterday’s close.”
“For EUR the key release is tomorrow’s flash CPI, which is expected to show a drop of –0.1%y/y, officially pushing the Eurozone into deflation.”
“Yesterday’s weak print from Germany helped to spur worries over pricing pressure and the potential response by the ECB at their January 22nd meeting.”
“The Eurozone services PMIs were weaker than expected, however the core themes for EUR are: 1) low growth and low inflation; 2) the potential ECB response; 3) negative rates encouraging outlows; 4) FX reserve managers diversifying away from EUR; 5) all juxtaposed against the strong US backdrop.”
“The near-term risks are: tomorrow’s CPI print, the January 22nd ECB meeting and the January 28th Fed meeting.”