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Euro Rose to 1.2990 from German IFO Data

Posted by Chris Advincula on May 24, 2013 6:24:00 AM

May 24 Friday 11:00 GMT

London, May 24 - The euro rose to 1.2990 from 1.2925 (+65 points) after the German Business sentiment survey rose to 105.7 in May, well above the median forecast of 104.5 as it rebounded after two consecutive declines. The data was encouraging and prompted speculation that the ECB may be less inclined to lower interest rates in the near term future.

The recent comments from the ECB officials had fueled expectations of a lower monetary policy, potentially the deposit rates to being negative. The euro rose 80 points to 1.2990 from 1.2910 against the dollar as of 11:00 GMT.

ECB easing prospects contrast with the speculation of the Federal Reserve Bank may scale back on its quantitative easing program if the U.S. economy improves further. Only two days ago on Wednesday, the Fed Chairman Ben Bernanke said stimulus measures could be trimmed at the next few FOMC meetings.

The 21-day moving average rose steadily to 1.2972 from 1.2915. The 30-day moving average closely resembles the path of the 21-DMA and rose to 1.2974. The 1.3000 psychological and option barrier will be closely watched as the New York session gets underway.

 

Chris Advincula

WorldWideMarkets

 

euro.5.24 resized 600

Chart: FXTrek.com

 

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