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Options prices showed the odds of the euro falling to $1 within six months rising to about 44% from 31% before the ECB's December 8 decision. The ECB's dovish taper reinforced bets on euro parity with the dollar.
Expectations of a weaker euro and firmer dollar increase the cost of dollar-priced imports for European buyers, a modest bearish signal for US commodity demand.
bloomberg.comStefania SpezzatiDec 11, 2016After 2,356 past bullish macro events, US Dollar (Broad) moved a median +0.2% over 5 sessions (60% higher; middle half -0.3% to +0.7%), and +0.4% over 20.
After 533 past bearish macro events, Euro (USD per EUR) moved a median -0.3% over 5 sessions (33% higher; middle half -1.2% to +0.2%), and -0.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The ECB's dovish taper on Dec 8 widened the policy divergence, adding to the euro weakness behind the dollar rally, though it came earlier.
