Daily FX Commentary
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Downside Euro protection
Tue, Feb 3 2009, 12:41 GMT
by Tim Clayton
Investica Ltd
Risk appetite remained generally weaker on Monday while the European economic data did little to support confidence. Any comments from ECB officials will remain extremely important ahead of Thursdays council meeting. Following January’s meeting, Chairman Trichet suggested that rates would be left on hold in February with the council waiting for fresh staff projections which will be available in March.
Since then, there has been additional pressure for rates to be cut again and any comments over the next 48 hours could provide important hints over the likely policy stance this week.
The Euro will continue to be unsettled by structural fears as markets debate the possibility of any Euro-zone economy abandoning the Euro. Fears over further credit-rating downgrades will also tend to be damaging for the currency.
Risk conditions improved to some extent during US trading with a degree of relief over the data and this allowed the Euro to recover back above the 1.28 level. The dollar remained slightly weaker on Tuesday, although the Euro was again unable to break above resistance in the 1.29 region as German retail sales fell
Published on
Tue, Feb 3 2009, 16:13 GMT
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Investica Ltd
http://www.investica.co.uk | tim.clayton@investica.co.uk
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