With renewed investor concerns in euro-zone debt back in the news, and the EUR/USD pair steadily falling over the last few days, all eyes will be on the speech from the European Central Bank president scheduled to take place at 18:00 GMT today. After hitting a 9-month high against the dollar last week, the euro began a bearish correction that it has not been able to reverse. Currently the EUR/USD pair is trading around the 1.3755 level, down nearly 200 pips since the start of the week.
Few analysts believe that the dollar’s bullish trend will last, especially given the quantitative easing plan unveiled by the Fed last week. In addition, the ECB is not expected to implement any significant changes in its monetary policy in the near future. Still, traders will want to pay attention to today’s speech for clues about how the euro-zone plans to deal with sovereign debt issues in Ireland and Portugal. A concrete plan from the ECB will likely go a long way in enticing investors to go back their riskier positions, thereby weakening the fragile greenback.
In addition to the ECB speech, traders will also want to pay attention to the latest US Unemployment Claims figure, set to be released at 13:30 GMT. Last week’s surprisingly positive Non-Farm Payrolls figure went a long way in helping the dollar against its main currency rivals. While it is unlikely today’s news will have the same impact, a better than expected figure may lend some assistance to the USD in afternoon trading. Although analysts still remain pessimistic overall in the US economic recovery, an improvement in the employment situation may be a good start in helping the greenback recover.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
