{"id":972,"date":"2012-04-13T14:10:00","date_gmt":"2012-04-13T14:10:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/04\/13\/forex-markets-euro-conditions-seem-to-be-in-place-for-a-correction\/"},"modified":"2012-04-13T14:10:00","modified_gmt":"2012-04-13T14:10:00","slug":"forex-markets-euro-conditions-seem-to-be-in-place-for-a-correction","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/forex-markets-euro-conditions-seem-to-be-in-place-for-a-correction\/","title":{"rendered":"Forex markets: Euro: conditions seem to be in place for a correction"},"content":{"rendered":"<p style=\"text-align: justify;\">The movements seen on the currency markets this week were not guided by  fundamental factors. Some trends may reverse net week. For the euro in  particular, conditions seem to be in place for a correction&#8230;<span lang=\"EN-GB\">&#8230;<\/span><strong><span lang=\"EN-GB\">&nbsp;<\/span><\/strong><span lang=\"EN-GB\">&nbsp;<\/span><span lang=\"en-GB\"><\/span><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><span style=\"font-size: 10pt;\"><strong>For professional investors and advisers only<\/strong><\/span><\/span>  <\/p>\n<hr \/>\n<p>The week that is coming to a close lacked especially important themes on  the currency markets. The dynamics observed may therefore be generally  considered of little interest, and should not be read as indicative of  trends.<\/p>\n<p><strong>USD (nominal effective exchange rate) <\/strong>\u2013 The dollar  weakened, although the movement was mitigated by Chinese data, which on  the whole drew a positive picture for the Chinese economy. Next week  more important economic data will be published in the United States,  with figures referred to April at the fore. Data should suggest a  stabilisation rather than an expansion of economic activity, but this  could in any case be enough to allow the dollar to recover part of the  ground lost in the past few days.<\/p>\n<p><strong>EUR <\/strong>\u2013 By contrast, the  euro strengthened. The single currency was helped by the statements made  by Mr. Coeur\u00e9 of the ECB, who managed to ease (limitedly and  temporarily) market concerns over Spanish debt. Coeur\u00e9 reminded that the  ECB does not lack the necessary instruments to carry out its job on  this front (Securities Markets Programme). However, the Spanish problem  is far from being resolved, and in the run-up to important elections (in  France on 22 April and in Greece on 6 May), some tension should linger  on the markets. The tension factor is negative for the euro, and on  Friday the G-20 will open. In this context, the euro could suffer an  erosion of this week\u2019s gains, which saw it rise from lows of 1.30 to  highs in the low EUR\/USD 1.32 area. Technically, the important support  to break through in order to allow a downside acceleration below EUR\/USD  1.3000 is 1.3030 \u2013 a level left untouched this week. Important data are  due in the week ahead, ZEW and IFO first among them. Negative numbers  would aid a correction of the exchange rate, with at least an attempt to  drop below the EUR\/USD 1.3000. The important intermediate downside  target is EUR\/USD 1.2827. The market is still prevalently short euro,  and this could further postpone the decline towards that level. However,  downside factors will mostly be concentrated in the short term (1m). <\/p>\n<p><strong>GBP \u2013<\/strong> Sterling tracked the euro against the dollar, climbing back from  GBP\/USD 1.58 to almost 1.6000. However, this movement was not justified  by fundamentals. What\u2019s more, the only important data release in recent  days was markedly negative: February trade balance figures showed a  sharper-than-expected increase of the deficit. Based on our estimates,  the contribution of net exports to Q1 2012 growth should be zero, or  even negative. In our view, the data released so far may justify further  monetary stimulus by from the BoE. To this avail, it till be useful to  read the minutes of the latest BoE meeting, due for publication on  Wednesday, to verify whether a majority stance is taking shape within  the MPC, or whether the split is still evident. Other important data  releases will concern inflation, the labour market, and retail sales. An  unexpected rise in inflation would strengthen sterling against both the  dollar and the euro. In order to compress the pound towards GBP\/USD  1.57-1.55, at least the other sets of data need to be negative. A  decline of the EUR\/USD exchange rate would also aid a correction of the  GBP\/USD.<\/p>\n<p><strong>JPY <\/strong>\u2013 The yen strengthened at the start of the  week in the wake of (1) renewed risk aversion, and (2) inaction of the  BoJ, which opted against introducing new expansive measures at its  latest meeting. However, the movement was restricted to between USD\/JPY  81 and 80. The BoJ also confirmed verbally that monetary policy will be  further eased. This prevented the yen from strengthening more, and  prompted a timid, incipient pull-back. Lingering market tensions&nbsp; next  week may hinder a stable return into the area above USD\/JPY 82.00.  However, barring disappointing US data, at least a foray above that  threshold should be likely. <\/p>\n<p style=\"text-align: justify;\"><span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span><\/p>\n<hr \/>\n<p> <span style=\"font-family: arial,helvetica,sans-serif;\"><strong> <\/strong><\/span> <\/p>\n<p style=\"text-align: justify;\"><strong><span style=\"font-family: arial,helvetica,sans-serif;\">Appendix<br \/>An<\/span>alyst Certification<\/strong><br \/>The  financial analysts who prepared this report, and whose names and roles  appear on the first page, certify that: (1) The views expressed on  companies mentioned herein accurately reflect independent, fair and  balanced personal views; (2) No direct or indirect compensation has been  or will be received in exchange for any views expressed. Specific  disclosures: The analysts who prepared this report do not receive  bonuses, salaries, or any other form of compensation that is based upon  specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This  research has been prepared by Intesa Sanpaolo S.p.A. and distributed by  Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the  London Stock Exchange) and Banca IMI Securities Corp (a member of the  NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for  the contents of this report. Please also note that Intesa Sanpaolo  S.p.A. reserves the right to issue this document to its own clients.  Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo  Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both  authorised by the Banca d&#8217;Italia, are both regulated by the Financial  Services Authority in the conduct of designated investment business in  the UK and by the SEC for the conduct of US business.<br \/>Opinions and  estimates in this research are as at the date of this material and are  subject to change without notice to the recipient. Information and  opinions have been obtained from sources believed to be reliable, but no  representation or warranty is made as to their accuracy or correctness.  Past performance is not a guarantee of future results. The investments  and strategies discussed in this research may not be suitable for all  investors. If you are in any doubt you should consult your investment  advisor. <br \/>This report has been prepared solely for information  purposes and is not intended as an offer or solicitation with respect to  the purchase or sale of any financial products. It should not be  regarded as a substitute for the exercise of the recipient\u2019s own  judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities  accept any liability whatsoever for any direct, consequential or  indirect loss arising from any use of material contained in this report.  <br \/>This document may only be reproduced or published together with the  name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo  S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management  Policy for managing effectively the conflicts of interest which might  affect the impartiality of all investment research which is held out, or  where it is reasonable for the user to rely on the research, as being  an impartial assessment of the value or prospects of its subject matter.  A copy of this Policy is available to the recipient of this research  upon making a written request to the Compliance Officer, Intesa Sanpaolo  S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has  formalised a set of principles and procedures for dealing with  conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is  clearly explained in the relevant section of Banca IMI\u2019s web site  (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or  their directors and\/or representatives and\/or employees and\/or members  of their households, may have a long or short position in any securities  mentioned at any time, and may make a purchase and\/or sale, or offer to  make a purchase and\/or sale, of any of the securities from time to time  in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and  circulates research to Qualified Institutional Investors in the USA only  through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167  New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This  document is intended for distribution only to professional investors as  defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a  printed document and\/or in electronic form. Person and residents in the  UK: This document is not for distribution in the United Kingdom to  persons who would be defined as private customers under rules of the  FSA.<br \/>US persons: This document is intended for distribution in the  United States only to Qualified Institutional Investors as defined in  Rule 144a of the Securities Act of 1933. US Customers wishing to effect a  transaction should do so only by contacting a representative at Banca  IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading  Ideas are based on the market\u2019s expectations, investors\u2019 positioning  and technical, quantitative or qualitative aspects. They take into  account the key macro and market events and to what extent they have  already been discounted in yields and\/or market spreads. They are also  based on events which are expected to affect the market trend in terms  of yields and\/or spreads in the short-medium term. The Trading Ideas may  refer to both cash and derivative instruments and indicate a precise  target or yield range or a yield spread between different market curves  or different maturities on the same curve. The relative valuations may  be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa  Sanpaolo S.p.A. trading ideas are made in both a very short time  horizon (the current day or subsequent days) or in a horizon ranging  from one week to three months, in conjunction with any exceptional event  that affects the issuer\u2019s operations. In the case of a short note, we  advise investors to refer to the most recent report published by Intesa  Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation  methodology, earnings assumptions and risks. Research is available on  IMI\u2019s web site (www.bancaimi.com) or by contacting your sales  representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n<p style=\"position: absolute; left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden;\" id=\"_mcePaste\">Normal 0 14       MicrosoftInternetExplorer4<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The movements seen on the currency markets this week were not guided by fundamental factors. Some trends may reverse net week. For the euro in particular, conditions seem to be in place for a correction&#8230;&#8230;&nbsp;&nbsp;<\/p>\n","protected":false},"author":2,"featured_media":3460,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[22],"tags":[],"class_list":["post-972","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-makrooekonomische-daten"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/972","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=972"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/972\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3460"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=972"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=972"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=972"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}