US President Donald Trump may finally get his wish for a weaker currency in 2020. Since October, the US Dollar has been under pressure, and the trend is anticipated to accelerate into 2020. Trump has criticized his central bank for not supporting the economy to the tune of global counterparts. He urged the Federal Reserve to slash interest rates into negative territory, following the EU, Switzerland, Japan, and Denmark.

US President Trump has made no secret that he is unhappy with his central bank and has repeated his call for negative interest rates in the US. Jerome Powell, the US Fed Chief appointed by Trump has cut interest rates over the past three consecutive FOMC meetings but cautioned that more cuts should not be viewed as a guarantee. According to a Fed statement, the FOMC “Will set monetary policy, as required by law, to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis.”

As the European Central Bank came under new leadership on November 1st when Christine Lagarde took over as President, the IMF wasted no time to issue a warning to all of Europe in regards to an economic slump. Interestingly enough, Lagarde was the Managing Director of the IMF. Many analysts are focused on the US-China trade truce, or better the first phase of it, which will do little to nothing to avert a pending global economic recession. Harvard Professor and former US Treasury Secretary Larry Summers added “I’m all for it.

Mario Draghi will chair his last ECB meeting today and leave the European Central Bank divided like it has never been before. His actions as ECB President will have an impact on the Eurozone long after her has moved on. Some credit him with saving the breakup of the Euro, but history will be the judge if he may have started the total destruction on the it. The economy remains fundamentally weak, the risk of deflation elevated and the fiscal outlook unstable. All this while Draghi has ushered on the era of negative interest rates in the Eurozone.

The dollar rose slightly against a basket of major currencies on Tuesday, while the euro came under pressure due to new signs of economic difficulties in the eurozone, while the pound was trading near a weekly low pending a key decision by the Supreme Court about Johnson’s decision  to suspend parliament.  

The single European currency rose against the US dollar after the European Central Bank launched a new stimulus, but could not justify the more dovish market expectations imposed on it.  

The European Central Bank (ECB) under President Mario Draghi has announced a massive new stimulus program in order to assist the ailing Eurozone economy. Besides cutting the deposit facility rate by 10 basis points to -0.50%, a fresh round of quantitative easing (QE) was announced. Starting November 1st 2019, the ECB will restart its bond buying program at a pace of €20 billion per month. The QE program is open-ended and will remain in place until inflation reaches the ECB target which currently stands at 2.0%.

On Monday, the single European currency backed down a bit on the eve of the meeting of the European Central Bank, which will be held later this week, at which new incentives are expected from politicians to support a weakening regional economy.  

Pound sterling hit its lowest level since January 2017 amid growing investor concern over Brexit without a deal, while warring British lawmakers continued to struggle to control negotiations on leaving the European Union.  

The rate of the single European currency shows a weak negative trend in relation to the US currency in trading on Thursday, awaiting a meeting of the European Central Bank, scheduled for today. This morning, the euro against the dollar fell to 1.1135 dollars per euro from the previous close of 1.1139 dollars per euro. The exchange rate of the US currency to the yen fell to 108.12 yen over USD from yesterday's close of 108.17 yen. The dollar index fell by 0.01%, to 97.72 points.

Markets continue to respond to the positive Friday release of NonFarm Payrolls. The US economy in June added 224 thousand jobs, which is much better than expected. Even a slightly higher level of unemployment, which rose to 3.7%, which is 0.1% higher than the five-year figure of May, could not prevent the good mood of investors. There is no significant statistics on the first day of the new trading week in the USA that would have an impact on the direction for the dollar. Markets will await Fed chairman’s testimony to Congress on Wednesday.

On Monday, the euro rose to a three-month high against the dollar, as bearish sentiment against the US currency remained stable after the US Federal Reserve last week gave a signal that it could soon cut interest rates. The euro strengthened its rally last week, when it added 1.4%, and grew by 0.15% to $ 1.1386 at the start of Asian trading session today, reaching a maximum since March 22. At the moment, the EURUSD pair is trading higher at 1, 1382.

Italy is taking steps to move closer to regaining sovereignty lost since replacing the Lira with the Euro. Italy has struggled more than economists expected and Italian politicians often blame the Euro as well as Eurozone monetary policies for their malaise. The country is home to the third largest economy in the Eurozone and since the election of its populist government which forged an unlikely alliance for the time being, has increased its tough anti-EU and anti-Euro stance.

Sentix, the pioneer in behavioural finance since 2001, has released its June 2019 report which offered a recession signal for the German economy. The trade war the US initiated with China is having an effect on investor confidence readings across economies as the global economic slowdown intensifies. PMI readings, industrial and manufacturing production data as well as factory orders have all clocked in below expectations for several months. Employment data has now joined the chorus of economic indicators which suggest that a global recession is around the corner.

The trade war between the US and China is heating up with the People’s Daily, the official newspaper of China, stating “We advise the U.S. side not to underestimate the Chinese side’s ability to safeguard its development rights and interests. Don’t say we didn’t warn you! United States, don’t underestimate China’s ability to strike back.” At the same time, trade talks between the US and EU collapsed which added another layer of issues for the slowing global economy and distress for the US economy specifically.

The second biggest election in the world, trailing only India which also just concluded and gave incumbent President Modi a major victory, are behind us. Over the next few weeks, as the EU Parliament will be reshuffled, forex traders will assess how this may impact the Euro moving forward. The EU has been plagued by infighting and slow bureaucratic progress and after the new mix of politicians following heavy losses by the Grand Coalition, this will only get more complicated over the next five years.

Just as many big banks have increased their bullish calls on the Euro on the back of an expected pick-up in economic activity, hard data pointed to the opposite. April PMI data was anticipated to point towards a rebound following a weak first-quarter, but today’s release pointed towards further contraction across key industries. Germany, the leader of the export oriented Eurozone economy, saw its Manufacturing PMI clock in at 44.5, below the expected reading of 45.0 and little changed from the 44.1 reported in March.

The global economy has cooled in the first-quarter of 2019 and there are plenty of factors which keep downside pressure on growth. Some analysts are now seeing economic green shoots as spring is blossoming. The biggest focus has been progress in trade talks between the US and China in order to end their trade war. The Eurozone economy has suffered significantly so far in 2019 which kept the Euro in refined to tightening trading ranges. Will the economic green shoots materialize or falter as summer approaches?

With traders focused on discussion between the US and China in order to resolve the trade war which the US initiated, many tend to forget and ignore the third player on the scene, the EU, and its own trade practices. While efforts are being made to find a solution which will work for the US and China, the EU is creating its own trade problems with both sides.

Germany is the export powerhouse of the European Union, the largest economy on the continent and the driving force behind EU surpluses as well as fiscal and political policies. Chancellor Merkel is approaching the end of her political career and her as well as her party, the CDU, have already suffered losses in regional elections. Her own election victory marked the worst showing for her party since World War II. With a slowing global economy and a leadership change during the next German elections, Merkel’s team as well as other officials are undecided on how to proceed.

After months of economic disappointments out of the Eurozone, it was only a matter of time until the EU cold no longer procrastinate what many traders, analysts and fund managers already knew: the Eurozone economy is deteriorating fast. Not only did the European Commission drastically cut its growth forecast for 2019, but it further stated that Brexit as well as the slowing Chinese economy would further decrease growth prospects for the Eurozone.

Economic data out of the Eurozone released this morning showed economic confidence posted its 12th consecutive contraction in the month of December. This represented a decrease in every single month for 2018 and the worst such streak since the global financial crisis in 2008. The Eurozone Economic Sentiment Index, which includes confidence data from households as well as companies, dropped to a two-year low.

The European Central Bank (ECB) is expected to keep its Interest Rate at 0.00%, its Deposit Facility Rate at -0.40% and its Marginal Lending Facility Rate at 0.25%. Many analysts don’t expect an increase in interest rates out of the ECB until September 2019 at the earliest. The press conference by ECB President Mario Draghi will be closely followed as the ECB is facing a series of headwinds as it is winding down its quantitative easing program. No changes is predicted in its current target to exit QE by December.

The European Union is great at one thing: holding summits. Brussels has the ability to negotiate any topic into the ground without ever reaching an agreement. The EU is now at it again. The fact that the EU functions on unanimous votes, which means all members have to agree, renders the entire institution useless. The idea is to show solidarity, but in reality the EU lacks this. It is almost impossible to get 28 different countries with different needs and backgrounds to agree on key topics. One solution doesn’t fit all European countries and creates great imbalances.

The US is entrenched in a trade war with China and it appears as this could last for years or longer. Some compare it to the start of a new cold war as tensions rise, both economies compete against each other and China is boosting its reach across the globe. This is by far the only trade related conflict the US is currently stirring up. This year in May, the Trump administration withdrew from the Iran accord and asked its allies to do the same. The EU, China and Russia have different plans in order to create legitimate trade with Iran, sidestepping US sanctions.

The 751-member European Parliament will vote tomorrow if it should trigger Article 7 of the EU Treaty against Hungary. Last year the European Commission recommended using Article 7 against Poland, but it has never been used before. It is a mechanism intended to force EU member countries who disagree with the EU to drop their opposition or risk losing their voting rights inside the EU.

A lot of forex analysts and traders are now wondering if the collapse in the Turkish Lira is over, or if another round of selling is around the corner. The Turkish currency has been losing value against the US Dollar and the Euro for since August of 2017. The reason was the economic policy which Turkey embraced.

Many still debate if we have a trade war on our hands already, or if it is more of a trade conflict or just trade fears. Regardless of where one stands in the assessment of the current trade environment, global markets have already started to to show signs of disruptions in the supply chain. Since last week, a currency war may be sniping down currencies before the full impact of a trade war can start counting casualties.

Italy may have another election as soon as this September as Italian President Sergio Mattarella rejected the Finance Minister picked by the coalition formed after election results a few weeks ago. Initially, Luigi Di Maio, the leader of the Five Star Movement, and Matteo Salvini, the leader of the Northern League, ruled out a coalition.

Italy is one of Europe’s biggest economies and a key anchor for the Eurozone behind Germany and France. It is also the economy which has never fully recovered from the last financial crisis as Italian banks are still loaded with bad loans and the Italian consumer is hesitant to open its wallet. Italy also has the second highest debt-to-GDP ratio with 131.1% as of 2014, trailing only Greece.

Let’s backtrack a bit into forex history, not to long ago, the Swiss National Bank (SNB) had their currency pegged to the Euro with an exchange rate of 1.2000 in the EURCHF as a boundary. The SNB vowed to defend this level at all costs and interfere in the forex market with its vast currency reserves in order to prevent the exchange rate from dropping below the 1.2000 level.

That’s one question which many would like to have answered. It is on everyone’s mind from the business community to the forex market. Previously the possibility of remaining in the customs union was a red line Prime Minister Theresa May and the pro-Brexit camp said they would not cross.

After UK voters decided to leave the European Union, the unthinkable happened for many pro-EU leaders: Article 50 was triggered. Article 50 is the former notification of a member country to leave the world’s largest trading bloc within 24 months.

The US Dollar is the world’s reserve currency and while that is unlikely to change over the next decade, forex traders should be prepared for an outflow of assets. Global central banks are due to shift $500 billion worth of reserve assets from the US Dollar into the Euro. This is only a small percentage from the global reserve pool which is estimated at $11.3 trillion.

Less than twelve months away from Brexit, business in the UK could soon receive a bit of news they have all been waiting for; the transition period. After the Brexit referendum, those UK businesses exposed to the EU have pleaded for a transition period in order to adjust to aftermath of Brexit. It was rumored that such a period will be agreed on, but no official announcement has been made.

With the Brexit mood souring again as EU President Donald Tusk is visiting the UK and the start of March ringing in the final twelve months of Brexit negotiations before the UK will leave the world’s largest trading bloc, the EU, some may not pay as much attention to what could move the Euro next: Italian elections. Italians will go the polls on Sunday, March 4th and many Italian voters are still undecided.

Last year at this time, the majority of forex traders and market professionals were talking about parity between the Euro and the US Dollar as the EURUSD dropped to as low as 1.03373 on an intra-day level. Price action had plenty of downside momentum and the phrase ‘the trend is you friend’ was thrown around. As with all trend, they do reverse and the Euro entered an explosive growth spurt. Twelve months later the EURUSD recorded an intra-day high of 1.25358.

The Euro has rallied all year long and there are many bullish factors behind the strong advance. The Eurozone economy is expanding at its best pace in six years which was confirmed with the preliminary third-quarter GDP increasing by 0.6% quarter-over-quarter and by 2.5% year-over-year. PMI reports are at very strong readings, consumer confidence is on the rise and unemployment is decreasing.

Mario Draghi, the President of the European Central Bank (ECB) does not use the term of tapering when he refers to adjustments to the central banks €60 billion per month quantitative easing program in the form of bond purchases. The consensus for today’s ECB meeting was that the deposit rate facility will remain unchanged at -0.40%, the central bank rate to remain unchanged at 0.00% and that the marginal lending facility will remain unchanged at 0.25%.

EUR prices down almost to $1.05 level at the beginning of the new trading week after the publication of the first results of the referendum in Italy on the issue of constitutional reform of the country. The last time the European single currency was so cheap in the spring of 2015.

As more and more deadlines approach and no deal is reached between Greece and its creditors the likelihood of a Grexit, which stands for a Greek exit from the Eurozone, is becoming a very realistic outcome. Forex traders need to monitor the situation very careful as it will have a big impact on the Euro.

All eyes have been on the European Central Bank since it started to reduce interest rates last year which led to its main interest rate at 0.05%, its marginal lending facility rate at 0.20% and its deposit facility rate of -0.20%.

Eurocurrency almost daily updates multi-year lows, which suggest themselves a long time but still scary for investors. Another local minimum of the euro tested early on Monday morning, as soon as the news of the events in Greece appeared. These elections frightened by the prospect for a long time but the reality, which is opening now, perhaps looks simply destructive to many traders.

The Greek elections are over and Greek President Papoulias has sworn in Alexis Tsipras as the new Greek Prime Minister.

The EURUSD has corrected by over 2,000 pips since it tried to breakout above the crucial 1.4000 level back on May 8th 2014. The EURUSD managed to rally until an intra-day high of 1.3994 marked the end of an advance many forex traders did not understand.

The EURUSD has corrected by over 2,000 pips since it tried to breakout above the crucial 1.4000 level back on May 8th 2014. The EURUSD managed to rally until an intra-day high of 1.3994 marked the end of an advance many forex traders did not understand.

Forex traders received another dose of negative economic news out of the Eurozone during the morning trading session. Many worry that the Eurozone may enter a triple dip recession which means a third consecutive recession and pressure on the European Central Bank to act on a wider stimulus have grown over recent weeks.

Today’s trading session saw another sharp drop in the Euro which initially appeared stronger enjoyed some upward momentum, as little as it was, which was a sigh of relieve for those trading on a stronger European currency.