After five consecutive down sessions, the single currency regained yesterday a bit of land, as an indicator of industrial activity better than expected in the euro area. The single currency grappillait 0.12, to 1,3906 dollar at the end of European session. But, at this stage, a real rebound seems hardly feasible. The week is peppered with obstacles and the motto of the sixteen could stumble under the technical threshold of 1,3750 dollar.
The first test will take place tomorrow, when the European Commission will deliver its official recommendations on the programme of the Greece regarding its budget deficit. "The problems of the Greece and concerns also about other States of the eurozone constitute a serious handicap for the euro, said Calyon team. The fact that Brussels request Wednesday to the Greece to impose more severe cuts in public sector spending is not likely to improve investor sentiment. "Greek bonds have severely chahutées last week, on a background of questions on a possible rescue of the country. Still nothing new on this issue was made. The Portugal, which was revised to increase the level of the fiscal deficit in 2009, has also fuelled fears.
Another front will open to the European currency at the weekend. The publication of the monthly report on us employment is one of the major catalysts for the foreign exchange market. Economists expect an improvement in the situation of the market of work in January: that 10,000 jobs could have been created, while the US economy has destroyed 85,000 in December. The unemployment rate should he remain stable at 10. Good figures give wings to the greenback, as it was already the beginning of December. Employment is the only macroeconomic indicator capable of breaking the correlation between the dollar and the aversion to risk, as it observed last year, when the dollar took advantage of the bad news and vice versa.
Crucial rendezvous
The theme of the differential between the US and euro area growth calls for a strengthening of the dollar against the euro in 2010, according to several strategists. Found at 5.7, US GDP in the fourth quarter, published last week, was also a very positive surprise to the market. Preliminary data on unemployment (ADP, weekly figures), and the statistics which mark the week, as the indices of activity will be evaluated in terms of this theme.
A crucial meeting also expected the pound sterling. The Bank of England (BoE) brings together Thursday its monetary policy Committee, which may decide to extend the program for purchases of debt or choose to stick to the$ 200 billion of pounds sterling which had been established. The ceiling has indeed been reached last week. "We believe that the BoE will pause and assess the effects of its policy, and this especially since the Governor and the other members should be aware of the risk that annual inflation soon exceed the threshold of tolerance of 3," said Calyon team. Same sound Bell at Barclays Capital, reminiscent of the United Kingdom has injected an amount around 15 of the GDP in nine months in operations of "quantitative easing". If the Committee confirms the judgment of gilt purchases, the British currency can logically resume forces. Yesterday, the pound sterling slipped 0.51 against the dollar (to 0,6277 book) and 0.63 against the euro (at 0,8730 book).
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