Euro/USD Daily Outlook –April 16

The Euro/USD mainly zigzagged during last week but the general direction this month so far was down. The concerns over Spain are still here and there are calls for another ECB intervention (perhaps another LTRO).  On today’s agenda: U.S. Retail Sales Report, Australia’s Bank Monetary Policy Meeting, FOMC member Pianalto Speaks and U.S TIC Long Term Purchases.

Here is a short outlook for the Euro /USD including the main news items and events that may affect this exchange rate for April 16th:

Forex Market February Update:

The Euro to US Dollar declined by 0.83% on Friday to 1.3078; during April, the EUROS/USD decreased by 2%. Furthermore, the Canadian Dollar and Aussie dollar also depreciated against the USD. The Yen also slightly depreciated against the US Dollar.

The chart below shows the development of the Euro to US Dollar during the month (UTD).

Chart Euro to us dollar Exchange Rates  April 16Correlation of Euro/USD and AUD/USD – April 16th

The chart herein presents the development of the linear correlation (moving correlation) between Aussie dollar/USD and Euro/U.S dollar (daily percent changes) during the last several months (up to April 13th).

Correlations Euro to us dollar and AUD USD  2011-2012 April 16

The chart shows stabilization in the relation between the two currencies pairs. Currently the linear correlation between the two daily percent changes of these items is nearly 0.65 for April. This might suggest the influence (if at all) of the Euro/USD on the direction of the AUD/USD has weakened in recent months. This may have been stem by the developments in the EU debt crisis.

Current Forex Indexes April 16th

Euro to US Dollar is traded at 1.3026 a 0.40% decrease as of 12:03*.

AUD to USD rate is at 1.0354 a 0.16% decrease as of 12:03*.

(* GMT)

Forex Related News for the Day

13:30 –U.S. Retail Sales Report: in the previous report, the retail sales increased by 1.1%; if this trend will continue it may positively affect USD; this report could signal the development in U.S’s commodities demand (for my review of the recent retail sales report).

17:30 – FOMC member Pianalto Speaks: I don’t usual point out to speeches of FOMC members expect of Bernanke’s however in preparation to the April FOMC meeting, this speech might revel another FOMC member’s opinion in regards to the recent developments in the U.S’s economy and the FOMC policy including the low rates and possible QE3; if Pianalto will hint of another QE program or will talk about the slow recovery of the U.S labor force, this news could affect the U.S dollar;

Euro to USD Daily Outlook

I speculate the Euro will continue its recent downward trend of the past couple of weeks. The Spain auction to be held this week may affect the Euro; on the other side if ECB will intervene  in the market again (e.g another LTRO program) this could rally the Euro against the USD. Finally if the upcoming US report on retail sales will show growth, it may strengthen the USD and thus may trade down the Euro/USD.

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