Euro / US Dollar (EU
EURUSD
Real-time - 03/24 10:01:27 pm
1.0795USD
+0.11%

Minimum bid rate unchanged

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04/05/2013 | 05:08 pm
Opinion : Check out the trading range breakout 1.2773 / 1.2958 
After an intense situation with the Cypriot case, worries still persist in the Eurozone where macroeconomic indicators are getting worse as the ECB is pursuing its monetary status quo.

Despite his blunder immediately putted right, the new Eurogroup President Jeroen Dijsselbloem, who indicated that the Cyprus bailout should serve as a model, calm is getting back on trading rooms.
Thanks to a series of restrictions, the reopening of Cypriot banks were conducted without conflicts. The Minister of Finance of Cyprus have resigned and the activity of the country remains particulary threatened by the freezing of firm deposits. Gloomy years in horizon.

Similar observation in Italy where Pier Luigi Bersani, charged of forming a coalition government, failed in his negotiations, leaving our transalpine neighbours at the heart of a political deadlock noxious for the future of the third european economy.

Besides, economic indicators stay bad as shown by the new record of unemployment rate at 12%.

In this context, Mario Draghi, consider that ECB cannot replace governments charged to engage structural reforms aiming growth return. Although he does not reject a comming decrease of minimum bid rate, commited to maintain an accomodating monetary policy “as long as necessary”, the Euro currency could paradoxically stay sustained by the fact that ECB policy would be less expansionist than his american, british or Japanese counterparts.

Technically, the euro is in a mid-term downward trend, could consolidate near the USD 1.2773 level. Without new catalyst indicators, we stay temporarly away of the parity.
Mathieu Burbau
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