The recent US data should help reinforce near-term optimism surrounding the economy, especially if there are equity-related inflows. The underlying situation is still brittle and fears over the US budget situation will also remain a negative influence for the dollar. Overall sentiment surrounding the Euro-zone economy and currency will remain weak and act as a major barrier to an extended Euro recovery. Overall, Euro gains are liable to be capped near 1.40 and renewed losses to at least 1.3850 are realistic following Thursday’s ECB meeting. Full Story
