Analysis and Recommendations:
The EUR/USD tumbled today falling 26 points to trade at 1.3718 as traders become more certain of some aggressive action by the ECB next week. While weak U.S. economic data has dampened market sentiment somewhat, many investors believe harsh weather conditions are to blame for the weakness and are waiting for fresh data, said Kathy Lien, managing director for New York-based BK Asset Management, in a recent note. Lien expects the dollar’s movement to remain in a small range until the release of the nonfarm-payrolls report on March 7, which “could still be distorted by the weather, but is first piece of market-moving U.S. data,” she said.
On Tuesday, the U.S. consumer-confidence index for February showed a decline to 78.1 from 79.4 in January, below expectations of 80.1 from economists polled by MarketWatch. Out earlier on Tuesday, S&P/Case-Shiller’s composite index showed U.S. home prices dropped 0.1% in December.
US Consumer Confidence fell from 79.4 to 78.1 in February. American citizens commented that economic conditions had improved recently, but that they didn’t expect the situation to accelerate in the near-term due to the impact of the adverse weather. The ‘polar vortex’, as it has been termed, has caused US economic output to freeze in the first few months of 2014, however, the ‘Greenback’ has remained fairly well anchored due to the Federal Reserve’s clear stance that asset purchases will be cut at regular intervals over the next few months.
Investors are looking ahead to euro zone inflation data on Friday, ahead of next week’s European Central Bank meeting, and Yellen’s testimony, when she is expected to be quizzed on what a spate of soft U.S. economic data means for Fed plans to cut back its huge bond-buying programme.
The EUR/USD tumbled today falling 26 points to trade at 1.3718 as traders become more certain of some aggressive action by the ECB next week. While weak U.S. economic data has dampened market sentiment somewhat, many investors believe harsh weather conditions are to blame for the weakness and are waiting for fresh data, said Kathy Lien, managing director for New York-based BK Asset Management, in a recent note. Lien expects the dollar’s movement to remain in a small range until the release of the nonfarm-payrolls report on March 7, which “could still be distorted by the weather, but is first piece of market-moving U.S. data,” she said.
On Tuesday, the U.S. consumer-confidence index for February showed a decline to 78.1 from 79.4 in January, below expectations of 80.1 from economists polled by MarketWatch. Out earlier on Tuesday, S&P/Case-Shiller’s composite index showed U.S. home prices dropped 0.1% in December.
US Consumer Confidence fell from 79.4 to 78.1 in February. American citizens commented that economic conditions had improved recently, but that they didn’t expect the situation to accelerate in the near-term due to the impact of the adverse weather. The ‘polar vortex’, as it has been termed, has caused US economic output to freeze in the first few months of 2014, however, the ‘Greenback’ has remained fairly well anchored due to the Federal Reserve’s clear stance that asset purchases will be cut at regular intervals over the next few months.
Investors are looking ahead to euro zone inflation data on Friday, ahead of next week’s European Central Bank meeting, and Yellen’s testimony, when she is expected to be quizzed on what a spate of soft U.S. economic data means for Fed plans to cut back its huge bond-buying programme.
