EUR/USD almost flat after ECB gets a new Vice President nomination on “consensus”

The market is concerned about ECB´s independence.
Broad recovery in the dollar is hurting EUR.

EUR/USD closed the European session around 1.2407, almost unchanged (+0.02%) after the ECB got a new Vice President on consensus nomination in the form of De Guindos, the current Spanish economy/finance minister.

As par De Guindos- “Steps need to be taken to deepen economic and monetary union and having been a government minister does not limit the independence of the ECB. Independence of ECB guaranteed by its mandate. He is neither a hawk nor a dove, but a pragmatic person”.

The market is assuming that De Guindos appointment has cleared the way for a German ECB´s president next year, when Draghi’s term will end and in that scenario, Weidmann, the current BUBA chief, may be the next president, who is known as a hawk, but now increasingly positioning himself as an owl (centrist) for the vital post.

For the EUR, there were no important economic data on Monday, but the current account for December flashed subdued at 29.9B against an estimate of 30.5B (prior: 35.0B). Basically, EUR weakness on Monday was a function of dollar recovery after Japanese government said that it is watching Yen move with “greater” sense of concern and is ready to act when actually needed.

Also, overall US economic data was positive for the USD on Friday along with US DOJ (Department of Justice) indictment report for the alleged Russian disinformation campaign.

Earlier, EUR came under some pressure after reports that Ireland has withdrawn its candidacy for ECB´s vice president and will support the Finance Minister (FM) of Spain as a “consensus” candidate. Incidentally, FM of Spain is not an economist and thus the market is concerned that likely appointment of a non-economist political figure may tarnish the image of ECB’s independence.

There is a strong buzz on the street that appointment of someone from Southern Europe like Spain could be strategic as someone from Germany is poised to take Draghi’s role next year.

Apart from politics regarding ECB’s VP post, EUR is also under pressure on news that Latvian central bank Governor Rimsevics, a member of the ECB’s governing council, was detained by the anti-graft bureau in a flurry of actions by officials, but later he was released on bail.

Overall, EZ economy is firing all the cylinders and performing well. Thus it now seems that ECB is not concerned about the strength of the currency and an eventual policy normalization. Over the last few months, ECB is increasingly shifting its focus from QE tapering to rate hikes.

Technically, EURUSD now needs to stay above 1.2350 area; otherwise, 1.2213-1.2200 and 1.2191-1.2052 may be visible soon. For any bounce back EURUSD has to sustain above the 1.2495-1.2560 zone towards 1.2595-1.2625 and the 1.2762-1.2881 area in the coming days.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Week ahead: Data blitz, Fed Minutes and RBNZ decision in the spotlight

The US jobs report for January, which was delayed slightly, didn’t do the dovish Fed bets any favours, as expectations of a soft print did not materialize, confounding the raft of weak job indicators seen in the prior week.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.