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17 Apr 2013
Forex: EUR/USD falls 100 pips on Buba’s Weidmann interview
FXstreet.com (Barcelona) - The market tumbled on the US session following an interview by Buba’s Weidmann to the Wall Street Journal in which he hints a ECB rate cut soon in case of more gloomy economic data in the Eurozone. Having peaked at 1.3199 high ahead of EMU construction output during the European morning, the EUR/USD was comfortable just below 13150 when the article was published and investors reacted by selling the EUR. The pair is now quoting 100 pips lower, stable at 1.3050, after printing a low at 1.3034.
Weidmann also warned that there are consequences to monetary policy action, “medication monetary policy makers administer only cures the symptoms and that it comes with side-effects and risks”, and said he believes it might take a decade for Europe to recover.
EMU construction output contracted by -0.8% on the month of February, following a wider fall in February of -2.1% (revised from -1.4%). The annualized figure came in at 0.8%, much better than the prior month data at -9.0% (revised from -7.3%). In Switzerland, Expectations by the ZEW survey surprised with a strong rise from 2.3 to 20 in April, beating the consensus of 5.
In the week ending at April 12, crude oil stocks fell against expectations, by -1.233M, while market consensus was pointing to a 1.20M rise following a 0.25M rise in the prior week. WTI crude oil is currently trading at $87.45, down by -1.46% on the day.
“The EUR/USD currency pair reached the level of 1.3190, which is the highest for this correction. We think, today the price may form another descending structure towards the level of 1.2700”, wrote Roboforex.com analyst Igor Sayadov, warning of a likely correction to return to the level of 1.2970. “Later, in our opinion, the pair may move upwards again to renew the current maximums”, he added.
Weidmann also warned that there are consequences to monetary policy action, “medication monetary policy makers administer only cures the symptoms and that it comes with side-effects and risks”, and said he believes it might take a decade for Europe to recover.
EMU construction output contracted by -0.8% on the month of February, following a wider fall in February of -2.1% (revised from -1.4%). The annualized figure came in at 0.8%, much better than the prior month data at -9.0% (revised from -7.3%). In Switzerland, Expectations by the ZEW survey surprised with a strong rise from 2.3 to 20 in April, beating the consensus of 5.
In the week ending at April 12, crude oil stocks fell against expectations, by -1.233M, while market consensus was pointing to a 1.20M rise following a 0.25M rise in the prior week. WTI crude oil is currently trading at $87.45, down by -1.46% on the day.
“The EUR/USD currency pair reached the level of 1.3190, which is the highest for this correction. We think, today the price may form another descending structure towards the level of 1.2700”, wrote Roboforex.com analyst Igor Sayadov, warning of a likely correction to return to the level of 1.2970. “Later, in our opinion, the pair may move upwards again to renew the current maximums”, he added.