The performance of EUR currency band is closely watched by global economists and analysts. As forecasted, the positive interest rate differential currency pairs (EUR/USD, EUR/CHF, EUR/JPY, EUR/GBP and EUR/CAD) are continuously stabilized at their lower currency bands. AND, as forecasted, the negative currency pairs (EUR/AUD and EUR/GBP) have reached their previous lower currency bands.
The global economists forecasted that ECB will cut the rate 0.25 % by July 5, 2012 to lower the rate from the current 1.00 % to 0.75 %. The rate cut was indicated by ECB on last June 2012 as quoted by Bloomberg. The performance of EUR currency band however does not indicate the possibility of ECB to cut the rate as the positive pairs are being continuously stabilized at their lower currency bands and the negative pairs underway to visit and near their lower currency bands. Should ECB cut the rate, ECB may undertake large market sterilization to defend those pairs at lower currency bands to establish new lower currency bands before they are established to move to upward direction. Nonetheless, the ECB rate cut forecast is scheduled within the time framework of the currency band stabilization.
At such, both the negative and positive interest rate differential currency pairs are now being stabilized at their lower currency bands. Depending to the ECB's monetary policy decision in July 5, 2012 (tomorrow), Should ECB not to cut the rate, then both positive and negative interest rate differential currency pairs will initiate to move to upward direction (up-trending) to visit their upper currency bands, BUT should ECB to cut the rate as forecasted by the global economists, then positive and negative interest rate differential currency pairs may be stabilized at longer time before they move to upward direction (up-trending) or they may be under pressured to establish their new lower currency bands before they move to upward direction (up-trending). LONG on EUR currency band's currency pairs will be analyzed (currency by currency), particularly for the positive interest rate differential currency pairs.
The global economists forecasted that ECB will cut the rate 0.25 % by July 5, 2012 to lower the rate from the current 1.00 % to 0.75 %. The rate cut was indicated by ECB on last June 2012 as quoted by Bloomberg. The performance of EUR currency band however does not indicate the possibility of ECB to cut the rate as the positive pairs are being continuously stabilized at their lower currency bands and the negative pairs underway to visit and near their lower currency bands. Should ECB cut the rate, ECB may undertake large market sterilization to defend those pairs at lower currency bands to establish new lower currency bands before they are established to move to upward direction. Nonetheless, the ECB rate cut forecast is scheduled within the time framework of the currency band stabilization.
At such, both the negative and positive interest rate differential currency pairs are now being stabilized at their lower currency bands. Depending to the ECB's monetary policy decision in July 5, 2012 (tomorrow), Should ECB not to cut the rate, then both positive and negative interest rate differential currency pairs will initiate to move to upward direction (up-trending) to visit their upper currency bands, BUT should ECB to cut the rate as forecasted by the global economists, then positive and negative interest rate differential currency pairs may be stabilized at longer time before they move to upward direction (up-trending) or they may be under pressured to establish their new lower currency bands before they move to upward direction (up-trending). LONG on EUR currency band's currency pairs will be analyzed (currency by currency), particularly for the positive interest rate differential currency pairs.
