Euro/USD Daily Outlook –February 22

Following the news regarding the approval of the Greek bailout (€130 billion) by the EU ministers of finance on Monday, the forex market returned to its slow paced activity.

Today, U.S. existing home sales report will come out along with the EU manufacturing PMI update.        

Here is a short outlook for the Euro /USD including the main news items and events that may affect this exchange rate for February 22nd:

Forex Market February Update:

The Euro to US Dollar decreased by 0.07% on Tuesday to 1.3234; during February, the EUROS/USD increased by 1.2%. The Canadian Dollar and CHF also slightly depreciated against the USD. The Yen also slightly depreciated against the USD.

The chart below presents the development of the Euro to US Dollar during February (UTD).

Chart Euro to us dollar Exchange Rates  22 FebruaryCorrelations among Exchange Rates –February 22nd

The chart herein presents the development of the linear correlation (moving correlation) between the Swiss Franc and the Euro/U.S dollar (daily percent changes) during the last four months (up to February 21st).

Correlations Euro to us dollar and CHF USD  2011-2012 February 22

The chart shows the strong relation between the two exchange rates. This relation has tightened in recent weeks; currently the linear correlation between the two daily percent changes of these currencies is nearly -0.96 for February. This might suggest the influence (if at all) of the Euro/USD on the direction of the USD//CHF is very strong and robust.

Current Forex Indexes February 22nd

Euro to US Dollar is traded at 1.3235 a 0.01% increase as of 13:56*.

GBP to USD rate is at 1.5671 a 0.68% decrease as of 13:56*.

(* GMT)

Forex Related News for the Day

EU Manufacturing PMI (January 2012): In the last flash report regarding January 2012, the Euro Zone Manufacturing PMI changed direction and reached 50.4; this news, in turn might affect the Euro;

U.S. Existing Home Sales: This report will show the changes in U.S. existing home sales during January 2012; this report might affect the strength of the US dollar. In the recent report the number of homes sold rose to a seasonally adjusted annual rate of 4.61 million home sales in December (see here the recent review);

Euro to USD Daily Outlook

I speculate the Euro will continue to dwindle with no clear trend. After the markets reacted to the news regarding EU approving the €130 billion bailout package on Monday, today the Euro and other currencies will probably trade with little movement. The upcoming reports from the EU and U.S. might move a bit the Euro/USD if these reports will present sharp changes.  

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