Vasilis Tsaprounis
Independent Analyst
The European single currency has slipped marginally below the 1,0550 level in the early hours of Thursday as the US currency remains in the spotlight with the crucial 1,05 level the next challenge.
US Treasury yields continue to be at high levels, the 10-y notes approaching again the recent high of 4.48 level something that supports the US currency.
My assessment that we will soon see some decompression in yields remains, with a return to near 4.00 levels being a likely scenario.
Yesterday's announcement on the path of consumer inflation in the United States did not provide any surprises with the result that there was no catalyst in play that could significantly change the bets.
The momentum that the US currency has developed in the wake of the US elections remains on the table and apart from some small subtle corrections the European currency has so far been unable to react.
Τhe political crisis that has erupted in Germany and the questioning of the government is putting an additional burden on the euro.
Ιn an environment of doubts, today's announcement on the development path of the European economy is expected with particular interest as the European currency is desperately looking for the catalyst to return to the fore.
The agenda is filled by the weekly claims for unemployment benefits in US as well as producer inflation.
I maintain a fairly conservative thought and although I think there will be a reaction of the European currency soon it is difficult to determine the right point so I prefer to remain on a wait-and-see attitude and not go against the trend.
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