Jump to navigation

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
Follow Futures          
       
more >>

We Asked Traders

We asked traders for their opinion on the launch of bitcoin futures

Sponsored Content

Trading

Equities.com launches unlimited trading via Tradier Brokerage, Transforming into a news & fintech portal

Featured Topics

more Commodities>>

Commodities

Energy demand steps back in play
Advertisement
more Volatility>>

Volatility

Volatility & opportunity in the energy sector
more Financials>>

Financials

Daily Price Action: E-mini S&P 500
more Options>>

Options

Trading Vertical Option Spreads

Euro-yen rate shows Draghi lament as Gross says sell

By Emma Charlton and Lukanyo Mnyanda, Bloomberg

April 24, 2013 • Reprints

The euro’s 25% jump against the yen over the past six months underscores the rising pressure on European Central Bank President Mario Draghi to cut interest rates as the region’s exporters lose out to Japan.

Futures traders are adding to bets that the ECB will lower its benchmark rate in the months ahead to weaken the currency, while economists now predict a quarter-point reduction at next week’s policy meeting. Even that may not be enough to stoke “real growth,” said Bill Gross, who runs the world’s largest bond fund at Pacific Investment Management Co. He expects a drop in the euro and advised investors yesterday to sell.

Draghi’s dilemma is that while his pledge last year to keep the currency union intact succeeded in boosting confidence, it also contributed to a euro so strong that it’s hurting competitiveness. A report showed that German business confidence fell for a second month in April, after data yesterday indicated euro-area services and factory output shrank for a 15th month.

“Draghi is aware of the slowdown we’re starting to see,” said Gavin Friend, a currency strategist at National Australia Bank Ltd. in London and the most accurate forecaster on the euro versus the yen in the first quarter. “Now we’re getting negative on the euro zone and negative on the euro. The market is starting to look toward the next meeting and the prospect of a rate cut. It’s going to be volatile from here on.”

Carmakers Slide

Economists watch the euro’s exchange rate against the yen because some of the region’s biggest exporters, including carmakers Daimler AG of Germany and PSA Peugeot Citroen of France, compete with the Japanese for sales into the U.S. and China.

In a mark of the struggle they face, shares of Toyota Motor Corp., Japan’s biggest automaker, have climbed 40% this year while Daimler’s fell 1.9%. Peugeot Chief Financial Officer Jean-Baptiste de Chatillon said today that exchange rates held back the Paris-based company’s first-quarter revenue by about 2%.

The euro rose 0.1% to 129.37 yen as of 8:27 a.m. in New York, after climbing to a three-year high of 131.12 yen on April 11. Against the dollar, it was little changed today at $1.2996, holding above its 52-week low of $1.2043 in July.

Central-bank officials “have to find ways to avoid that the euro appreciates and actually try to make it depreciate,” former ECB Executive Board member Lorenzo Bini Smaghi said in an interview on “Bloomberg Surveillance” with Sara Eisen and Tom Keene on April 17. While the ECB doesn’t target exchange rates, “they are important for price stability and for growth,” Draghi said on April 19 in Washington.

Page 1 of 3
>>next >

About the Author

Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Related Articles
Potentially dovish ECB could accelerate EUR/USD’s breakdown
GBP/CAD: Canadian CPI and retail sales in focus
Daily forex rundown: Euro, yen, Aussie & CAD
Daily forex rundown: Euro, yen, Aussie & CAD
Daily forex rundown: Euro, yen, Aussie & CAD
Previous
Sprint beats estimates even after 560,000 customers depart
Next
Coffee falls further on anticipated Brazil crop size
Related Terms
Bloomberg 5254European Central Bank 3208forex 2882Euro 2647California 1387yen 1272Bank of Japan 1119fx 1080Morgan Stanley 934Goldman Sachs Group Inc. 864Mario Draghi 685UBS AG 455Twitter 371Bundesbank 261Draghi 245BNP Paribas SA 224Royal Bank of Scotland Group Plc 206Bill Gross 198Pacific Investment Management Co. 164Commerzbank AG 161Group of 20 countries 144Finance Ministry 133ECB 122Tom Keene 83Toyota Motor Corp. 81Rabobank International 64Total Return Fund 39Sara Eisen 33National Australia Bank Ltd. 29Abe 24Daimler AG 18PSA Peugeot Citroen 16ECB Executive Board 16Peugeot 12Lutz Karpowitz 12Lorenzo Bini Smaghi 12euro-area services 11Michael Sneyd 8Pimco 6Gavin Friend 4James Kwok 2euro-yen 1Organization for Economic Cooperation and Development in Paris 1George Cole 1Jean-Baptiste de Chatillon 1

Free Newsletter Modern Trader Follow

Main menu

  • Futures
    • Modern Trader Magazine
    • Commodities
    • Futures Mag Archives
    • ETFs
    • Financials
    • Forex
    • Managed Funds
    • Market Analysis
    • News
    • Options
    • Regulation
    • Technology
    • Trading Strategies
    • Education
    • Futures Op-Ed
  • Favorites
    • Alpha Pages Most Popular
    • Futures Magazine
    • Modern Trader Magazine
    • Most Popular
    • Slideshows & Lists
    • Special Topics
      • Alpha Hunters
      • Bad Boys
      • FINtech
      • High-Frequency Trading
      • Trader's Life
      • Trading Strategies
      • FUTURES MAG's 500th ISSUE
      • We asked traders
  • Traders
    • Market Data
    • Hot Charts
    • Interactive Charts
    • Trading Calendar
  • FINalternatives
  • Hard Assets
    • Home
    • Base Metals
    • Precious Metals
    • Rare Earth Metals
    • Commodities
    • Mining Investments
    • Slideshows
  • Modern Trader
    • Subscribe
    • Past Issues
  • All +
    • Follow Us +
      • FuturesMag
      • Newsletters
      • Facebook
      • Google+
      • Linkedin
      • Twitter
      • RSS Feeds
    • About Us +
      • About
      • Advertise
      • Contact
      • Contribute
      • Privacy Policy
  • !
images