2013-05-17 02:50 GMT

Talking Down the EUR

The euro came under selling pressure today against the U.S. dollar after European Industry Commissioner Tajani tried to talk down the currency. As the head of an agency whose goal is to protect the export sector, Tajani complained that the euro is too strong and called on the central bank to manage the currency in a way that would help exports. Considering that the euro has been in a downtrend since the beginning of the month and has lost over 5% since the beginning of February, some investors may be surprised by the timing of Tajani's comments. However it is clear that underperformance of the Eurozone economy, which is currently in recession is a big motivation for industry officials, politicians and central bankers to make overtures to weaken the euro now versus February. In addition, with the currency in a downtrend, comments such as these will have a greater impact on the euro. As the ECB considers whether to introduce negative deposit rates or purchases of asset backed securities, a weaker currency will provide additional support to the region's economy.

Yesterday, the Eurozone reported a record trade surplus for the month of March. Thanks to a rise in exports, the region's trade balance rose to 18.7B, up from 12.7B. Unfortunately there was very little enthusiasm after the report because the details showed imports falling 1%. Domestic demand is a major problem for the Eurozone and a key factor in the 0.2% contraction the region endured in the first quarter so while the trade numbers improved, the impact on the euro was limited. Non-farm payrolls in France also fell 0.1% in the first quarter, a sign that the region's second largest economy continues to struggle. No Eurozone economic reports are scheduled for release tomorrow so all eyes will be on comments from ECB officials - Coeure, Asmussen, Praet and Mersch are scheduled to speak. If these 4 policymakers confirm that negative deposit rates or ABS purchases are on the table, the EUR could extend its slide. -FXstreet.com

2013-05-17 09:00 GMT

EMU. Construction Output w.d.a (YoY) (Mar)

2013-05-17 12:30 GMT

Canada. Consumer Price Index (YoY) (Apr)

2013-05-17 13:55 GMT

USA. Reuters/Michigan Consumer Sentiment Index (May)

2013-05-17 15:00 GMT

USA. CB Leading Indicator (MoM) (Apr)

2013-05-17 04:58 GMT

Nomura's survey on USDJPY suggest higher quotes

2013-05-17 04:26 GMT

Technical picture continues to become more bearish for EUR/USD

2013-05-17 03:57 GMT

AUD/USD, how far can it go? 0.9750/10 next demand

2013-05-17 02:40 GMT

USD/CHF inching toward hourly resistance trend line at 0.9675