28 Apr 2014
EUR/USD stable, waits for EMU's CPI - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, underlines the crucial release of April's CPI in the euro bloc.
Key Quotes
"The euro also continues to remain stable in the near-term which is somewhat surprising given that rising geopolitical tensions related to developments in the Ukraine are likely triggering euro supportive capital inflows. In addition, the ongoing tightening of liquidity conditions in the Eurosystem is encouraging a further rise in euro-zone short rates which should prove supportive for the euro."
"Excess liquidity in the Eurosystem has fallen just below EUR100 billion placing increasing upward pressure upon euro-zone short rates. The EONIA rate continues to drift higher and has already jumped to 33 basis points ahead of month end which is also close to the same level as the three-month Euribor rate which is at its highest level since mid-August 2012."
"The resulting tightening in overall monetary conditions will be increasing pressure upon the ECB to lower policy rates further in the near-term, which would help to dampen euro upside potential. The release of the latest euro-zone CPI report for April will be in focus in the week ahead."
Key Quotes
"The euro also continues to remain stable in the near-term which is somewhat surprising given that rising geopolitical tensions related to developments in the Ukraine are likely triggering euro supportive capital inflows. In addition, the ongoing tightening of liquidity conditions in the Eurosystem is encouraging a further rise in euro-zone short rates which should prove supportive for the euro."
"Excess liquidity in the Eurosystem has fallen just below EUR100 billion placing increasing upward pressure upon euro-zone short rates. The EONIA rate continues to drift higher and has already jumped to 33 basis points ahead of month end which is also close to the same level as the three-month Euribor rate which is at its highest level since mid-August 2012."
"The resulting tightening in overall monetary conditions will be increasing pressure upon the ECB to lower policy rates further in the near-term, which would help to dampen euro upside potential. The release of the latest euro-zone CPI report for April will be in focus in the week ahead."