morbius glass

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morbius glass: FX watch

Posted by Adrian on August 26, 2008

FX watch: EUR/USD

The last country essentially holding off the greater European Union from falling into an all out recession is Germany. But the German GDP came in very weak. With negatives in both capital and construction investments, overall negative GDP on quarter on quarter of -0.5%. With Germany’s consumer and private consumption contracting quite severely, this would no doubt give enough reason for the European Central Bank to cut rates within the next quarter, or sooner (despite higher inflation in the whole EU economy).

This will inevitably weaken the EUR dollar against the US dollar, which of late has risen against most of the worlds currencies. The only factor keeping the USD from strengthen more is the volatile oil price (caught between 110 support and resistance of 120).

The EUR will continue it’s sell, I would not be surprised if the EUR would fall further below 146 against the USD (surpassing lows seen on the 19th August 2008).

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One Response to “morbius glass: FX watch”

  1. […] and economy they are: morbius glass: Energy markets, Commodities and Geopolitical analysis and morbius glass: FX watch Possibly related posts: (automatically generated)50% chance of recession in Japan: GoldmanBank of […]

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