{"id":66505,"date":"2015-01-14T07:51:46","date_gmt":"2015-01-14T12:51:46","guid":{"rendered":"http:\/\/countingpips.com\/?p=66505"},"modified":"2015-01-14T08:05:20","modified_gmt":"2015-01-14T13:05:20","slug":"euro-collapses-to-another-nine-year-low","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2015\/01\/euro-collapses-to-another-nine-year-low\/","title":{"rendered":"Euro collapses to another nine-year low"},"content":{"rendered":"
January 14, 2015<\/div>
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Article by ForexTime<\/a><\/p>\n

The main story on the currency markets revolves around the EURUSD appearing on the verge of opening the doors to 1.16, after the pair crashed down to 1.1726 following the European Court of Justice (ECJ) confirming that any bond-buying programme from the European Central Bank (ECB) would be legal. Traders have become even more tempted to price in the introduction of QE from the ECB now, with the EU economic sentiment looking more bleak on a near-daily basis.<\/p>\n

Since the most recent US GDP was confirmed at an annualised 5% days before the Christmas break, the EURUSD has been on a complete one-way journey down the charts. Although the pair may have already dipped from 1.22 to 1.17 since, US interest rate optimism has been consistently reaffirmed by continually improved economic performances and repeated commitment to raise US rates, according to comments from the Federal Reserve. Not only has this supported the USD but it has dramatically reduced any hopes for the pair to record even the slightest of recoveries, with the upside potential being most likely in a scenario of USD weakness.<\/p>\n

Unfortunately, the EU economy has commenced the year with data that has just further alerted the markets that it is in trouble. The announcement last week that EU deflation had set in at an annualised 0.2% just intensified the pressure on the ECB to do more to reinvigorate the economy and combat this ongoing battle against dangerously low inflation levels. Overall, the repeated indications of further easing to come from the ECB have now strengthened even more following the morning ruling, with this further signifying to the markets that there appears to be a far larger scope for the EURUSD to continue its fall from 1.39.<\/p>\n

The other major mover on the currency markets has been increased demand for the JPY, which has strengthened significantly following the World Bank global economic downgrade this morning. Since December, we are continuing to witness increased demand for the JPY whenever global economic uncertainty arises to attract the market\u2019s attention. This is largely why the JPY has been my personal choice for surprise currency to strengthen as 2015 commences, and we are continuing to see the currency strengthen each time global stocks are pointing to the red, and they have been doing so a lot recently due to investor fears over ever-declining oil prices.<\/p>\n

I also feel that investors are becoming clued-in regarding Japan most likely benefiting the most from the collapsing oil prices. Many are quick to assume that Abenomics is a failed economic framework, but what many don\u2019t realise is that no matter how much JPY weakness helped export competitiveness, the high trade deficit always provided a problem to Shinzo Abe. The trade deficit has always remained high because Japan was importing so much energy. This was a repercussion of Japan\u2019s nuclear power plants being closed down following the Fukushima disaster in 2011. Lower oil prices are going to benefit the Japanese economy because it will reduce Japan\u2019s trade deficit, which will also improve government debt.<\/p>

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Written by Jameel Ahmad, Chief Market Analyst at FXTM.<\/b><\/p>\n

For more information please visit: Forex Time\u00a0 <\/a>
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Disclaimer:<\/b> The content in this article comprises personal opinions and ideas and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime Ltd, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The main story on the currency markets revolves around the EURUSD appearing on the verge of opening the doors to 1.16, after the pair crashed down to 1.1726 following the European Court of Justice (ECJ) confirming that any bond-buying programme from the European Central Bank (ECB) would be legal. Traders have become […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-66505","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66505","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=66505"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/66505\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=66505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=66505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=66505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}