Mario Draghi - The Euro Savior

[Vinayak 10]

 

Mario Draghi has had such an impact on the Euro and the state of finances in the Euro zone that congress services had cut wi-fi signals and frequency inhibitors to stop the words of Draghi from leaving the closed room and becoming public.

 

The man that describes himself as European first, Italian second has come to pass as a signal for forex traders to initiate positions on the Euro and its related currency pairs depending on whether his remarks and attitude be hawkish or dovish. He stressed the resurgence of the Euro and it soared a couple of weeks back and then he talked extensively about the need to prevent the Euro from rising too high and it hit some record lows.

 

Super Mario as he has come to be called by fellow Europeans ignited fears across the continent when he became the front runner for the ECB job as inflation and Italians are such a happy couple.

 

The good thing is his measures have been quite in contrast to this. The one thing that puts Draghi apart is his "international mentality". Draghi was one of the people who helped in getting the Euro of the ground in the first place.

 

Anyway, I am going to use this thread to keep you in the loop on Draghi and the fate of the Euro.

[Mysticforex 13]

Great! looking forward to it.

[M.A 10]

Draghi, for many, is euro savior. But he is actually "over-involved" in doing it which has already started problems for eur. Strengthening euro on purpose may work for short term but can never work for longer term. This is what we r now watching in euro case. In feb, eur is continuously loosing . Draghi was too involved in supporting individual eurozone countries.

 

I dun agree with the point displaying Mario as eur savior. He played his cards well but in the end he knew that more intervention means currency war. So the current scenario and weakness in eur is actually correction which was due. Bad GDP data from whole eur zone reflects that strengthening eur was on purpose.

 

For fundamental analysts, his comments r of high value which impact market greatly.

Edited February 20, 2013 by M.A

[uexkuell 10]

 

Mario Draghi has had such an impact on the Euro .....

 

... (he) has come to pass as a signal for forex traders to initiate positions on the Euro and its related currency pairs depending on whether his remarks and attitude be hawkish or dovish. He stressed the resurgence of the Euro and it soared a couple of weeks back and then he talked extensively about the need to prevent the Euro from rising too high and it hit some record lows.

 

This whole thing about Euro crisis is highly overdone.

 

Perhaps you might take the time and look for a second at this chart:

Euro | comdirect

 

There you might notice that 2002 Euro started to rise and then at 2008 it switched to a ranging behavior.

 

If you want to see what "crisis" means take a look at S&P 500 in the same timeframe which is also plotted in the chart for comparison.

 

You will also notice that from 2008 on there were several rebounces of Euro from support completely without any Draghi.

 

 

The Euro crisis is in my view mainly a product of the media.

Certainly Greece is toast. Spain, Italy and France are in heavy trouble.

(But then England is in trouble, USA is in trouble....)

But that does not at all mean that the Euro has to go down beyond a truely significant level (like 1.1800).

[M.A 10]

This whole thing about Euro crisis is highly overdone.

 

Perhaps you might take the time and look for a second at this chart:

Euro | comdirect

 

There you might notice that 2002 Euro started to rise and then at 2008 it switched to a ranging behavior.

 

If you want to see what "crisis" means take a look at S&P 500 in the same timeframe which is also plotted in the chart for comparison.

 

You will also notice that from 2008 on there were several rebounces of Euro from support completely without any Draghi.

 

 

The Euro crisis is in my view mainly a product of the media.

Certainly Greece is toast. Spain, Italy and France are in heavy trouble.

(But then England is in trouble, USA is in trouble....)

But that does not at all mean that the Euro has to go down beyond a truely significant level (like 1.1800).

 

Eurozone crisis is not actually of "ALL" euro countries. Which is why u cannot see a clear decline in eur. But if u see performance of individual countries in eurozone, mentioned by u, u will notice a situation of severe crisis.

Why there is no solution found till now? Because no third party within eurozone wants itself to be involved in crisis and they consider it a matter of individual countries. There r many statements similar to "we dont want to solve eurocrisis at the cost of our country's economy". So it looks almost impossible for eurozone to solve it in near future.

[zdo 20]

... I am going to use this thread to keep you in the loop on Draghi ....

 

Vinayak,

In your view, what’s he 'fixing'?

Which one(s)? European economy? 'Incrementing' the EU ? The EUR? 'Perceptions' ? ________?

Thanks.

 

 

Eurozone crisis is not actually of "ALL" euro countries. .

 

M.A.,

Which countries are not part of crisis ?

Thanks

[M.A 10]

Vinayak,

M.A.,

Which countries are not part of crisis ?

Thanks

 

It will be a long post if I start posting graphs and then explain them. The best thing is to have a look at the following wiki link. It is not the only link but I think information provided is enough to understand about which eurozone countries r in "crisis".

 

European sovereign-debt crisis - Wikipedia, the free encyclopedia

[Vinayak 10]

Vinayak,

In your view, what’s he 'fixing'?

Which one(s)? European economy? 'Incrementing' the EU ? The EUR? 'Perceptions' ? ________?

Thanks.

 

I guess he's fixing all of it since he is the ECB President; but with a special emphasis on the EUR.

 

This week it won't be much about Draghi though. We've got the ongoing elections in Italy. The EUR/USD and other EUR related currency pairs should be watched closely. If the media tycoon Silvio Berlusconi were to win the election, it would not be good news for the Euro zone currency and I would expect it to fall below the support level of around 1.3230. If he loses, then the EUR should soar.

Talking about the EUR/USD, it has shown some weakness recently. The positive news out of Germany (ZEW survey, GDP figures, etc) haven't really changed the fortunes of the Euro as was widely expected. However, it is nowhere near any long-term support levels and there could very well be a pull back in the upcoming week. Nonetheless, I would look to trade the pair based on what happens in the Italian elections.

Getting back to the macro news out of the Euro zone - it was good. The two major indices - the DAX and the FTSE 100 - soared mainly due to remarks from the respective Central Banks.

Even as stock markets rose in the Euro zone, the Euro and the British Pound fell. The aggressive bond buyback as part of the stimulus is partly to blame for the currency devaluations.

[zdo 20]

I guess he's fixing all of it since he is the ECB President; but with a special emphasis on the EUR.

 

...

 

Then would it be accurate to say that he has the same bosses as the US's Ben B ?

Thanks.

[uexkuell 10]

What the markets show in the moment - a deep plunge due to Italy's elections - is complete madness.

 

Probably the same people who can think things as

Draghi = savior

now think like

Berlusconi = end of Euro / perhaps antichrist

 

Certainly Berlusconi and some other clowns in Italy are not serious.

But for sure there are some other people around in foreground as well as in the background who show them which way they have to go.

[SIUYA 11]

Berlusconi is the new black swan.

 

Just when you think it is safe - he comes up behind you and grabs you on the butt.

 

..........

on a more serious note - nothing has changed, the debt remains, the same problems remain and people have less trust in things - more indecision means more uncertainty and more mistrust. Lessons not learnt.

[Vinayak 10]

Not much from Draghi this week. He is going to make some remarks in 40 minutes at the Katholische Akademie in Bayern. I could never say that right even if I tried a million times.

 

I will keep you posted if there is anything big coming from him. It's money in the bank then!

[Vinayak 10]

Guys sorry I wasn't able to get back to all of your'll. I will do so in due course. I've been having a busy week trading.

 

Just wanted to drop a line here to watch out for the Euro Minimum Bid Rate announcement at 12:45PM GMT on Thursday and then of course the press conference that immediately follows where Mario Draghi will be speaking.

 

I will have more on this thread as the event draws closer. So long for now.

[Vinayak 10]

 

Draghi has been influential for quite some time now, but I guess any central bank head will have that type of influence on the country's currency.

 

The chart above is from this time last year.

 

Big day tomorrow. That's all I will say for now.

[Vinayak 10]

Draghi strikes again. Watch this thread for details.

[Vinayak 10]

This just in:

 

The Cypriot parliament has rejected the controversial bank deposit tax, thereby blocking the EU bailout plan.

[Vinayak 10]

Draghi in London for "The Future of Europe in the Global Economy" Event

 

ECB President Mario Draghi's speech on Thursday called for a more European UK and at the same time echoed the sentiment that the Euro zone economy will continue to expand albeit with some carefully selected measures. Still, there are EU members like Germany that will show some explosive growth and lead the region's recovery in the coming months.

 

The US Durable Goods Orders figure rose 1.3% in April, beating forecasts for a 0.5% gain after sliding 1.7% in March and this turned out to be bad for the EUR/USD that dipped once again.

 

Going forward forex traders should closely watch the broader market sentiment when trading the EUR/USD currency pair. The capital markets were rather threatening this past week and this could bring back the bears in full force. Then there could very well be a Euro zone recession this will see the EUR/USD slide further.