Dollar in Strong Rally
April 24th, 2008WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
Weakness in Germany and France is taking the euro down sharply vs. the dollar. Gold has broken down again; under $900.
After EUR/USD 1.600 it’s no surprise that we’re seeing a pull back. I’ll wait for the weekly candles to print before I do a more detailed analysis.
Via: Reuters:
German and French business morale fell sharply in April, depressed by a triple-whammy of high oil prices, a strong euro and market turmoil and raising questions about whether the ECB will keep up its hawkish tone.
The stronger-than-expected deterioration in corporate sentiment in both Germany and France, the euro zone’s two biggest economies, reflected an abrupt downturn in sentiment across the broader European single currency area.
In Germany, the Ifo economic institute said on Thursday its business climate index fell to its lowest level since January 2006, dropping to 102.4 from 104.8 in March and falling below all forecasts in a Reuters poll of 52 economists ECONDE.
In France, which together with Germany accounts for roughly half the euro zone’s economic output, business sentiment fell to its lowest level in nearly 1-1/2 years in April.
“The euro zone economy is coming under stress, particularly the more resilient part of the euro zone,” said Bank of America economist Matthew Sharratt, adding that the European Central Bank could moderate its tough tone after the data.
ECB policymakers said on Tuesday the bank was prepared to raise interest rates if needed to bring inflation under control, the latest in a run of recent hawkish comments that helped drive the euro
The euro fell to a one-week low versus the dollar after the Ifo data.
In further evidence of weakness across the region, Dutch business confidence fell in April to its lowest level since the end of 2005, while consumer confidence also slipped. In Belgium, business morale suffered its biggest ever monthly drop.
