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Good day to you.
Exports of the Eurozone member states was up by eleven percent although domestic demand still remains weak. Bad economic situation in Spain and the doubt of investors regarding the government in repaying its debt led to a 6% high interest rate for government bonds. The cost of borrowing in Spain for a ten-year bonds rose to a critical level. Meanwhile, the interest rate on ten-year German bonds made a record low.
Chinese government decided to let its currency float more (Yuan) in order to reform its currency policy. It was announced on Saturday that the government allowed the Yuan against the dollar exchange rate to be more flexible from a half percent range to one percent.
Oil inflation increased the cost of living and inflation in the euro zone for March. Inflation in the seventeen countries in the euro area rose to 2.7 percent. Central banks in Europe has a target of two percent inflation and this is the sixteenth consecutive month that the euro zone inflation is higher than the ceiling.
From a technical perspective: The EUR/USD faces uncertainty. The 1.3 range is a very strong support and prevents the collapse of the euro against the dollar. This support is stable from mid-February until now. Every time the price has come to this area, buyers of euro react quickly and do not allow the price to be closed below it. If the EUR/USD closes below 1.30, it may go down to the range 1.2780.
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