Euro/USD Daily Outlook –February 14

The Euro started off the week with moderate falls; currently the Euro/USD continues its descent. Moody’s will downgrade the credit ratings of six European countries. These countries include Italy, Spain and Portugal. Moody’s also stated it might downgrade in the future the AAA credit rating of France, U.K and Austria.

Today, the: Great Britain CPI, American Retail Sales and German ZEW economic sentiment will come out.        

Here is a short outlook for the Euro /USD exchange rate including the main news items and events that may affect forex trading for February 14th:

Forex Market February Update:

The Euro to US Dollar slightly decline by 0.08% on Monday to 1.3186; during February, the EUROS/USD rose by 0.79%. The Australian Dollar and CAD on the other hand appreciated against the USD; the Yen also slightly appreciated against the USD.

The chart below shows the development of the Euro to US Dollar during 2012 (UTD).

Chart Euro to us dollar Exchange Rates  14 FebruaryCorrelations among Exchange Rates –February 14th

The chart below presents the linear correlation (moving correlation) between the Aussie dollar and the Euro/USD (daily percent changes) during past several months (up to February 13th).

The chart presents a rise in the past couple of days in the relation between the Euro/USD and Aussie dollar/USD. The current correlation between the two daily percent changes of these currencies is nearly 0.54 for February. This might suggest the influence (if at all) of the Euro/USD on the direction of the AUD/USD has slightly strengthen.

Correlations Euro to us dollar and AUD USD  2011-2012 February 14

Current Forex Indexes February 14th 

Euro to US Dollar is traded at 1.3169 a 0.13% decrease as of 09:32*.

GBP to USD rate is at 1.5727 a 0.25% decrease as of 09:32*.

(* GMT)

Forex and Commodities News for the Day

Great Britain CPI: some expect the January inflation will be lower than in recent months; in the previous report regarding December the annual CPI declined from 4.8% to 4.2%; this news may influence British pound traders;

German economic sentiment: The upcoming publication will refer to the ZEW indicator of economic sentiment for Germany for February 2012. For January 2012 the ZEW indicator for Germany increased to -21.6 (see here the recent report);

U.S. Retail Sales Report: this report will show the monthly changes in the retail sales and food services during January 2012; in the recent December report, the retail sales, when controlling for the price changes, slightly rose by 0.1% from the previous month (see here my review of the recent report).

Euro to USD Daily Outlook

The recent news of Greece’s new austerity plan didn’t affect much the direction of the Euro. The recent announcement of Moody’s might also have little influence on Euro traders. Finally, the upcoming reports from GB, US and Germany might also moderately affect the EURO/USD if there will be sharp changes.

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