December 2019

Dec. 12, 2019 ( – As expected, in its last meeting for the year the ECB announced that rates will remain unchanged, while the ECB President Christine Lagarde committed to review existing monetary policies and strategies.

Policy makers kept their projections for inflation and economic growth in the Euro-area and reiterated that QE will stay in place at least until inflation starts approaching the 2% level.

The ECB managed to shave the momentum off the EUR rally fueled by the Fed’s meeting yesterday, with the single currency retreating toward $1.11 from a session high around $1.1150.



Dec. 11, 2019 ( – Pressure mounted on the USD today after the Fed decided to keep the benchmark rate in its current 1.50% to 1.75% target range and hinted that it might hold rates steady through 2020.

The EUR managed to climb back above $1.11 and tested resistance at $1.1116. A bullish breakout here would open the door to a move targeting the recent double top around $1.1185.

Below is the FOMC Statement in its entirety as released by the Federal Reserve earlier today.

“Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports remain weak. On a 12‑month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee decided to maintain the target range for the federal funds rate at 1‑1/2 to 1-3/4 percent. The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective. The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.”


Dec. 6, 2019 ( – A blockbuster U.S. Non-Farm Payrolls report gave a short-lived boost to the greenback, but most dollar bulls seem to be sitting on the sidelines in expectation of the upcoming FOMC meeting on Wed., Dec. 11.

The odds of another rate cut by the Fed next week have diminished as the U.S. economy added 266k jobs in November, higher that the forecast of 180k, and more than doubling the 128k gain in jobs for October. The unemployment rate also saw an improvement with a decline to 3.5% in November from 3.6% in the previous month.

At the moment, the market consensus is for the Fed to hold rates steady within the current 1.5% to 1.75% range at its December meeting. Such decision would move the Fed into more neutral mode following a sequence of three consecutive rate cuts announced at the Fed’s last three meetings.

Dec. 5, 2019 ( – The EUR bulls have been in charge for the last few trading sessions, however, today’s disappointing retail sales data, combined with a weak GDP report from the Euro-area, did little to offer further impetus to the recent euro rally.

October was a very poor month for European retailers with sales falling by 0.6% month over month, while year over year increase came up to only 1.4%, compared with 2.7% y/y in the previous month. That’s almost 50% drop in the annual reading, but it would be interesting to see if shopping for the Holidays would provide a much-needed boost in December’s retails sales figures.

The final GDP reading for Q3 2019 did not impress, either. Economic growth in the Euro-zone was confirmed at 0.2% q/q and held steady at 1.2% y/y.

In the last couple of days, the EUR has been trying to break decisively above $1.11 and the single currency continues to linger around this level at the time of this publication.

It is now up to tomorrow’s U.S. Non-Farm Payrolls report to offer the catalyst for the next more significant move in the EUR/USD exchange rate.

Forecasts point to an upbeat employment data with the U.S. economy expected to add 180k new jobs in November from 128k in October, while the unemployment rate remains unchanged at 3.6%.