The EUR proved on Wednesday that it can still produce gains versus the USD, but it also proved that it remains vulnerable. The economic data released from Europe yesterday did little to strengthen sentiment among those backing the EUR, this as GfK German Consumer Climate reading and French Consumer Spending both produced less than glorious results. Today the German CPI figures will be brought forth and the inflation figures are likely to be rather deflated. The crux of the matter remains the Sovereign Debt concerns for the continent and what is emerging as an austerity and ‘growth’ crisis. The OECD weighed in on the matter yesterday claiming that Europe faces no danger of a ‘double dip’ recession, but the organization’s track record at prognosticating is less than good. Making matters more interesting is that some major institutional investors like Pimco have said they believe a restructuring of Sovereign Debt by some E.U. nations is a clear possibility. The EUR will continue to be tested and traders will have to choose their positions carefully.
Written by bforex.com