European Markets Forecast – Week of March 30th
March 30th, 2009 Posted in Euro-Zone
EUR
This past week’s trading of the EUR/USD saw the USD come roaring back on Friday’s trading session, pairing the gains the EUR made in the previous week after the Federal Reserve announced it will begin a quantitative easing program. The gains were seen in the Dollar as market sentiment shifted against the EUR. It is suspected that the European Central Bank (ECB) may undertake its own program of buying long-term bonds to increase liquidity in the stalled European economy. The pair finished the week at 1.3289 down from a high of 1.3737 on Monday.
All eyes will be on ECB President, Jean-Claude Trichet, as he is set to deliver a speech Monday morning. Many suspect he may announce a quantitative easing program, similar to that announced less than two weeks ago by the Federal Reserve. If the ECB does in fact elect to begin purchasing long term government bonds, this may drive the EUR/USD even lower. The 1.3000 level could be reachable by the end of Monday’s trading.
GBP
The GBP also saw stark depreciation against the Dollar, though the depreciation began on Wednesday and continued through the end of the week where the GBP/USD finished trading at 1.4318. The drop came as British economic indicators once again failed to reach their targeted levels. Against the EUR, the Pound was more positive as the EUR/GBP fell to 0.9279 from 0.9387.
Traders should pay close attention to the European Minimum Bid Rate announcement and the accompanying statement. European interest rates are expected to be cut by 0.50% on Thursday. This could help send EUR/GBP back down towards the 0.9200 level.
CHF
This Friday, U.S. Non-Farm Payrolls are to be released and will surely bring high volatility to the markets. A worse than expected showing for the pungent American employment numbers could benefit the Swiss Franc, perhaps to the 1.3000 level.
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