Comment on the situation on a market 13.02.14

EUR/USD still consolidating

Rapid decrease of EUR yesterday was due to the speech of a member of European Central Bank Executive Board Benoit Coeure. Mr Coeure announced that the bank will have a close look on the issue of a negative deposit rate as a possible solution to stop EUR consolidation and to stimulate company and consumer lending. But the speech of another European Central Bank Executive Board member Luc Coene leveled rapid decrease of EUR as he announced that the bank wants to get additional information regarding inflation perspectives before they decide either to take further actions for EuroZone economic support or not.

It looks like Mario Dragi can’t take a decision whether to take additional measures to decrease the value of EUR or not.  These is some sort of dilemma. On one hand strong EUR stops European economy from the recovery and on the other hand the decrease in value of European currency leads to mistrust for all the assets nominated in Euros.

It seems that ECB does not want to take any decision at the moment and the just expect a smooth reduction of asset buyout and general improvement of USA economy to increase the value of USD and ECB will not have to take any measures to  weaken the EUR.

Semen Kamensky​