Forex: EUR/USD – Trading near intraday high

iNVEZZ.com Wednesday July 10th: The euro has so far today gained 80 pips on the dollar, after being down to 1.2754 in American trading yesterday. The current intraday high at 1.2844 represents a 0.2 percent gain for the day.

Yesterday’s low – and the lowest price since April 4 – was reached after ECB executive board member Jorg Asmussen stated that the present cash rate of 0.5 percent could be maintained for more than 12 months. Asmussen’s comments, echoing as they do a similar sentiment recently expressed by ECB president Mario Draghi, are being interpreted by the market as meaning no prospect for higher yields at any time in the next year.

The gloomy outlook for the Eurozone continued unabated yesterday when the International Monetary Fund lowered its growth expectations for the 17–member region. According to the IMF’s World Economic Outlook, there will now be 0.6 percent contraction this year, up from the 0.4 percent forecast in April. The recession in the Eurozone seems to be ‘deeper than expected’, was the IMF’s pessimistic appraisal.

In Eurozone updates today, and in seeming validation of the IMF prognosis, French Industrial Production was down to a 0.4 percent rise in May from 2.2 in April, and Italian Industrial Production fell short of expectations, with growth of just 0.1 percent against the prior month’s 0.3.
In the US today, there are two key events on the schedule. US Fed chairman Ben Bernanke is due to speak on the US economy after the European market closes. His address will follow release of the minutes of the Federal Open Market Committee’s meeting of June 18-19 just after 21:00 BST.