EUR – Single Currency Remains Strong

On little economic data from the E.U. the EUR continued to effectively trade to the stronger part of its month long trend. Today the Final Services PMI will be released and is anticipated to have a mark of 56.0, which would meet the previous report head on. The argument being put forth from EUR bulls is that the ECB and E.U. have dealt with the financial crisis that was the focus of international investors most of the spring. Tomorrow the ECB will hold their monthly monetary policy meeting and statement. Certainly no change is going to be made to the interest rate as stagnation continues to be the dominant theme in Europe, but the press conference of ECB President Trichet is sure to be of interest. Trichet has managed to put a positive spin on the outlook for the EUR and has fostered a belief that a Sovereign Debt crisis has been completely averted. However, there does remain a contingent of investors who have their doubts and point to what they perceive as near impossible austerity that will be hard to attain. In other words the question is whether or not the E.U. has merely pushed the problem down the block and leaving it to be dealt with another day?

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