The Euro’s recent decline could continue during the shorter trading week ahead of the Christmas break. After the IMF’s announcement that they do not believe Ireland will be successful in achieving the goal of budget deficit measuring 3% of GDP by 2015 unless they fiscal spending is further reduced, or increasing tax revenues, sentiment towards the single currency remains negative.
The market had been looking at the conclusion of the EU summit for supportive measures. However, the creation of a permanent mechanism to provide support for the Euro unsurprisingly will not come into play until 2013. Therefore with no immediate plans of action, the recent concern over peripheral sovereign debt issues form within the Euro zone look to weigh on the single currency in the near term.
On the data front there is little in terms of primary releases that will remove the sovereign debt concerns for the minds of traders. The highlights are the German PPI m/m, and Euro zone Current Account for the Euro zone. Taking the light data load from Europe into account, the U.S fundamentals could determine whether or not EUR/USD recent declines have added momentum. Existing Home Sales, Unemployment Claims, Core Durable Goods Orders and Personal Spending will have the markets assessing the validity of the second round of quantitative easing, and consequently the direction of the U.S dollar.
http://www.traderscorner-online.com/
No comments:
Post a Comment