{"id":19223,"date":"2011-02-09T08:05:07","date_gmt":"2011-02-09T13:05:07","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=19223"},"modified":"2011-02-09T08:05:07","modified_gmt":"2011-02-09T13:05:07","slug":"euro-and-crude-oil-recover-following-chinese-interest-rate-increase","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/02\/09\/euro-and-crude-oil-recover-following-chinese-interest-rate-increase\/","title":{"rendered":"Euro and Crude Oil Recover Following Chinese Interest Rate Increase"},"content":{"rendered":"<p><strong>By Russell Glaser<\/strong><\/p>\n<p>Rising expectations for an interest rate hike by the ECB have bolstered the <a href=\"http:\/\/www.forexyard.com\/blog\/en\/2011\/02\/04\/fx-weekly-preview\/\">euro<\/a> in today\u2019s trading.  <a href=\"http:\/\/www.forexyard.com\/blog\/en\/2011\/02\/08\/oil-likely-to-drop-further-following-tomorrows-inventories-report\/\">Crude oil <\/a>was also a benefactor after rising off of its daily lows following an increase in Chinese interest rates.<\/p>\n<p>Traders originally sold the euro  following disappointing German industrial sales which contracted by  1.5%. Economists had forecasted an increase of 0.2%. However, market  participants have since been encouraged by comments from ECB President  Trichet that <a href=\"http:\/\/www.forexyard.com\/blog\/en\/2011\/02\/03\/european-interest-rates-on-tap-today\/\">interest rates <\/a>can be increased prior to the normalization of ECB monetary policy.<\/p>\n<p>The EUR\/CHF traded as high as 1.3100 and looks to close above the 100-day moving average at 1.3075.<\/p>\n<p>The headline event of the day was an increase in Chinese interest  rates as the PBOC hiked interest rates by 25 bps. The rise in the 1-year  interest rate now takes the base lending measure in China to 6.0%. This  move did not come as a surprise to the market which has predominantly  priced in future tightening measures.<\/p>\n<p>While one might be hesitant to put an exact level for future Chinese  interest rate increases, most market participants are expecting further  interest rate moves as well as other tightening measures to slow the  rate of inflation in China.<\/p>\n<p>Spot crude oil traded stronger after an initial knee-jerk reaction  following the Chinese interest rate announcement when the commodity fell  as low as $88.87, a price that coincides with the rising trend line  from the August lows. The price then recovered and traded as high as  88.10.<\/p>\n<p><em><strong><a href=\"http:\/\/www.forexyard.com\/?zone_id=1398\" target=\"_blank\">Forex Market Analysis provided by ForexYard. <\/a><\/strong><\/em><em><strong><a href=\"http:\/\/www.forexyard.com\/?zone_id=1398\" target=\"_blank\"><br \/>\n<\/a><\/strong><\/em><\/p>\n<p>\u00a9 2006 by FxYard Ltd<\/p>\n<p>Disclaimer: Trading Foreign Exchange carries a high level of risk and                                                                                                                                                                                                                                                                                                                                                                                          may                 not                be                                                           suitable                         for                          all                                                                                            investors.                                             There                                     is            a                                                                                                                                                    possibility                                                      that                                                                         you                                                  could                                                                   sustain   a                           loss                                           of                 all                              of                                         your                                                                                                                                        investment                 and                                                                                                               therefore                 you                                                                                          should                          not                                                                  invest                                                                   money                           that                                  you                                                                                      cannot                                                            afford            to                                                                         lose.                     You                                                                                  should                                be                                          aware                             of                                                          all                                     the                                     risks                                                                                                                associated                                               with                                                    Foreign                                                                               Exchange                                                                                         trading.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Rising expectations for an interest rate hike by the ECB have bolstered the euro in today\u2019s trading. Crude oil was also a benefactor after rising off of its daily lows following an increase in Chinese interest rates.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-19223","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19223","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=19223"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/19223\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=19223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=19223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=19223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}