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Eric Viloria, Forex senior currency strategist, weighs in on Moody’s downgrade of Spanish regions, and euro weakness.
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-- -- -- I'd -- Euro falling to a one week low against the dollar and Spanish borrowing costs rising again as pressure mounts on Spain guess what.
To seek a bailout the weight goes on -- can see the Euro down.
At 1297.
Before joining me now is Eric Gloria six.
Currency strategist with four -- we'll talk about the Euro and public currencies well let's begin with the Euro.
He say this is some very range bound trade right now between what 128 month that he too.
Yeah it's been supported by the 200 day simple moving average on the bottom which is just about 128.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- We could see initially a movement higher however in the long term you still have -- -- potential recession right now on the euros on and the fundamentals remain weak so.
-- the long -- we're looking for your weakness.
Okay but -- -- and totally understand why now -- OK we know that the global economy is slowing we've seen that in the results in this latest earnings season on the fact has the impact of -- risk appetite.
The dollar clearly wins in that it does the -- pickup as well traditionally.
Traditionally yes because the US dollar seen as a safe haven so Japanese yen but when you look at what the 2 central banks are going.
You have the Fed printing unlimited amounts of the paper doing quantitative rising whereas the Bank of Japan has a set amount.
We know how much that they're doing its eighty trailing we know over what timeframe.
And because of that because you're looking at.
I'm buying -- US dollar -- -- Japanese yen as a haven you wanna buy a Japanese yen because they have a limited amount of quantitative easing or as the Fed.
There are no interest staying in the -- the -- that the strong the end terrible for their exporters may have.
It's a huge -- of their economy.
That's right and that's why a lot of times you see that the Japanese yen doesn't reflect these fundamentals because the fundamentals have been coming out week while the currency has remained strong so it's been a problem for them.
Liquidity that we always talk about China that manipulation of the U on -- -- -- has that gone in recent months menial on.
We've seen Chinese economy slowdown official does that have an impact on the U on without government intervention.
Well you know the Chinese economy as a second largest economy in the world so that certainly -- had an impact on on all currencies and -- Huntsman in general.
We're gonna see some -- out tonight on official manufacturing PMI out of China.
And what we're looking for is when is that slowing growth the united turnaround in China when's that gonna bottom out.
So depending on how those PMI numbers come out.
You know that could really -- -- sentiment moving forward very good all right -- Gloria thanks so much for the next appreciate it.
