EUR/USD jumps 50 pips

This morning’s impressive drop in the EU’s trade balance figures has helped move the EUR/USD rate higher.

This particular currency cross is still coming to terms with last week’s Federal Open Market Committee minutes, which saw the EUR/USD jump by 400 pips on the day and then subsequently drop 150 pips over the next four trading days.

This morning we have seen the EU’s trade balance fall from €15.2 billion down to €14.6 billion, which, together with the ZEW sentiment jumping from 30.6 to 32.8, has helped the currency cross move back higher.

The current chart offers a far from clear vision of where EUR/USD is heading, as it is oscillating around the 1.3000 level and has been unable to break out of this range for the last four months.

With both Europe and the US stating that they will be keeping their respective interest rates at low levels for the foreseeable future, it is unlikely that base rates will give much guidance looking forward.

The debate that has been raging for the last month over the exact timing of any US tapering of the current quantitative easing process will be the biggest catalyst in moving the currencies.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.