Vasilis Tsaprounis
Independent Analyst
The single european curency is currently holding steady near the 1,0850 level in anticipation of a stormy day of announcements as US consumers inflation and Minutes from the latest Fed meeting could increse the volatility and give some direction in the exchange rate.
Yesterday as expected did not give any surprises, the range of fluctuation remained limited with the European currency moving slightly higher trying to approach the 1,09 level but without succeeding.
Investors remain cautious as it was seen and yesterday they avoided big bets in view of today's critical economic announcements.
The general picture of the market remain the same but the next two days with today's important economic data and the Ecb meeting tomorrow could change the bets.
Despite the exceptional resistance shown by the European currency and its ability to react, the US dollar is likely to be in the spotlight again, especially if the inflation figures are announced higher, something that will keep on the table the prospect that interest rates cuts from Fed will not to be aggressive.
I remind that at the moment most bets are concentrated on the possibility of three interest rate cuts but increased inflationary data will shift some bets to the possibility of just 2 cuts, which is expected to strengthen the US currency.
I remain on hold but have not moved away from my thought to buy the euro in case of some sharp dip well below the 1,07 level.
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