Euro Drops against the Majors
Posted on 07. Dec, 2009 by admin in Daily Euro Analysis, Euro Currency, Euro Currency News
The Euro tumbled against most of the major currencies during last week’s trading session. The Euro’s depreciation took place mainly against the Dollar and the Pound. The Euro dropped about 200 pips against the Dollar and the EUR/USD pair is now trading around the 1.4860 level.
It seems that there are two main reasons for the Euro’s downfall last week. The first was the European Central Bank’s (ECB) decision to leave the Euro-Zone’s Interest Rates at 1.00%. The decision has left investors confused about whether the Euro-Zone economies are truly on the verge of putting the crisis behind them, or is it still to soon to tell. The second was the sharp uptrend of the Dollar, which took place due to the U.S Non-Farm Employment Change’s unexpected positive figures. The combination of the uncertain outlook of the Euro-Zone and the upbeat data from the U.S have boosted the Dollar and weakened the Euro as a result.
As for the week ahead, a lot of potentially deep impacting economic publications are expected from the Euro-Zone. The German Industrial Production report for October is expected on Tuesday. The German economy is providing relatively positive data lately, and if this report will continue along this line it is likely to support the Euro. Traders should also follow the ECB President Trichet’s speech today, scheduled for 13:00 GMT. If Trichet decides to refer to the possibility that the ECB will hike rates in the near future it could strengthen the Euro back towards last week’s levels.
