Euro/USD Daily Outlook –February 21

The Euro started off the week rising after the Greek bailout (€130 billion) was approved earlier today.  The EU ministers of finance approved after 14 hours of discussions the second bailout plan for Greece and thus prevented Greece from reaching default on its debt in March. The ministers agreed on the measures the Greeks will have to implement in order to cuts its debt to 120.5% of its GDP by 2020. Currently the Euro/USD is traded slightly falling.

Today, Great Britain Net borrowing will come out along with the EU confidence report.        

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 21st:

Forex Market February Update:

The Euro to US Dollar increased by 0.78% on Monday to 1.3243; during February, the EUROS/USD increased by 1.2%. The Canadian Dollar and Aussie dollar also appreciated against the USD. On the other hand the Yen slightly depreciated 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  21 FebruaryCorrelations among Exchange Rates –February 21st

The chart below presents the development of the linear correlation (moving correlation) between the Aussie dollar and the Euro/U.S dollar (daily percent changes) during recent months (up to February 20th).

Correlations Euro to us dollar and AUD USD  2011-2012 February 21

The chart demonstrates the strong relation between the two exchange rates even though in the past couple of weeks the correlation has declined. The current correlation between the two daily percent changes of these currencies is nearly 0.63 for February. This might suggest the influence (if at all) of the Euro/USD on the direction of the AUD/USD is still robust.

Current Forex Indexes February 21st

Euro to US Dollar is traded at 1.3208 a 0.26% decrease as of 12:22*.

GBP to USD rate is at 1.5813 a 0.24% decrease as of 12:22*.

(* GMT)

Forex Related News for the Day

Euro Area Consumer Confide Report: see here the last report on this index.

Great Britain Net borrowing: this update will show the monthly changes in the public sector net borrowing for January 2012; as of December 2011, the net borrowing reached £13.7 billion;

China flash Manufacturing PMI: this index will cover 800 companies in 20 industries in China; according to the HSBC Manufacturing PMI report regarding December 2011 the Manufacturing PMI slightly rose and reached 48.8; this index indicates the changes in China’s manufacturing sectors growth rate;

Euro to USD Daily Outlook

I speculate the Euro will continue its upward trend as the recent Greek crisis was averted for the time being. There aren’t reports to be published today that are directly related with the Euro or US dollar. Thus the news of the recent approval of the Greek bailout will probably continue to lead the direction of the Euro/USD during the day.   

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