Euro over a barrel?

EUR/USD dropped to its lowest level in seven months during today’s online forex trading on news that the European economy had contracted by 0.2% in the second quarter. The declining price of crude oil has bolstered the dollar in recent days, helping the greenback to extend the gains it made against the euro in August. As of almost 5PM EST, EUR/USD stood at 1.4493, down from 1.4520 Tuesday. Forex analysts charting the trajectory of the EUR/USD over the past two years place the pair near its long-term uptrend support line of 1.4473.

The EU economic slowdown was attributed to several factors, including a decline in exports, consumer spending, and company investment. Crude oil fell to $109.46 a barrel on demand worries tied to the global economic slowdown and news from Royal Dutch Shell Plc and ConocoPhillips that Hurricane Gustav had not caused any damage to platforms in the Gulf of Mexico.

Falling oil prices are likely to increase pressure on the euro in the currency trading market over the coming weeks. Many analysts expect crude prices to plummet nearer the $100 mark, and BusinessWeek reports that some analysts are predicting a price floor of $80 a barrel.

September 3rd, 2008 | Comments Off on Euro over a barrel?

For the euro, August is the cruelest month

It’s been a volatile year for those who engage in online trading of the EUR/USD. In 2007, the dollar fell off as much as 13% against the euro. Until this month, it looked like 2008 would also be a banner year for the Eurozone’s currency. The euro surged above $1.60 in both April and July forex trading, hitting an all-time high of $1.6038 on July 15th. But based on the vicious beating that the euro has taken in August, T.S. Eliot’s assertion that “April is the cruelest month” might need to be reconsidered. On August 8th, the euro dropped below $1.50 for the first time since February and below its 200-day moving average for the first time since 2006. As of this writing, EUR/USD is hovering around $1.4673.

Many forex analysts anticipate that the remainder of 2008 will see the euro continue to decline against the dollar. On August 7th, in a statement that at least indirectly led to the next day’s online forex trading debacle, ECB president Jean-Claude Trichet opined that the third quarter would be “particularly weak” for Eurozone GDP growth. As the recession that grips the U.S. spreads beyond its borders, the dollar is likely to strengthen, further challenging the dominant EUR/USD trend of the past years.

More EUR/USD-related forex news to follow…

August 27th, 2008 | Comments Off on For the euro, August is the cruelest month