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19 May 2014
ECB-speak would drive the EUR’s price action today – Danske Bank
FXStreet (Edinburgh) - In the view of Sverre Holbek, Senior Analyst at Danske Bank, the lack of relevant data releases in the euro bloc will prompt investors to follow speeches by ECB officials.
Key Quotes
‘”Today’s speeches by ECB board members Weidmann, Mersch and Coeure will get a lot of attention as the market trades mainly on what the ECB might do at its rate-setting meeting in June”.
“It remains uncertain what exactly the ECB has in mind. However, ongoing speculation about what Draghi’s ‘promise’ includes is likely to weigh on the euro in the coming weeks, although current pricing shows that the market expects the ECB to deliver more than ‘just’ a refi and deposit cut”.
“The latest CFTC positioning data, which cover the week from 6 to 13 May, show that speculative investors slashed net long EUR and CHF positions following the ECB meeting. According to the data, speculative accounts are now slightly net short EUR”.
“At the same time, the market also seems to be speculatively net short USD. However, both EUR and USD positioning remain in neutral territory, indicating that there is, from a positioning point of view, a large potential for a further move lower in EUR/USD “.
Key Quotes
‘”Today’s speeches by ECB board members Weidmann, Mersch and Coeure will get a lot of attention as the market trades mainly on what the ECB might do at its rate-setting meeting in June”.
“It remains uncertain what exactly the ECB has in mind. However, ongoing speculation about what Draghi’s ‘promise’ includes is likely to weigh on the euro in the coming weeks, although current pricing shows that the market expects the ECB to deliver more than ‘just’ a refi and deposit cut”.
“The latest CFTC positioning data, which cover the week from 6 to 13 May, show that speculative investors slashed net long EUR and CHF positions following the ECB meeting. According to the data, speculative accounts are now slightly net short EUR”.
“At the same time, the market also seems to be speculatively net short USD. However, both EUR and USD positioning remain in neutral territory, indicating that there is, from a positioning point of view, a large potential for a further move lower in EUR/USD “.