Traders are expecting a slow news day, and as such may experience thin trading conditions and low liquidity. The few reports expected shouldn't cause too much of a stir, but with thin trading it may result in some decent price action. The EUR's uptick on Monday has many concerned that the 16-nation currency is now due for a downward correction, especially given the rapidly declining sentiment in the Euro-Zone caused by decisions made in Greece and Portugal concerning national debt and government spending, respectively.
The US Dollar has steadily risen over the past few days, with other regions experiencing continual weakness from economic woes. Yesterday's price movements gave little indication of direction for the greenback, however, as the price seemed to enter a consolidation trend against the majority of its primary currency rivals.
Against the EUR, the Dollar gained only moderately from 1.3677 to 1.3620, and similar results against the Pound, finishing the day near 1.5600. As of this morning, on the other hand, the USD appears to be in a mild decline as part of the consolidation taking place since last Friday. Analysts are beginning to anticipate a dramatic price movement sometime early this week.
Today's news events may not create the spark necessary to push the USD out of its currently flat trend. The Investor's Business Daily's TechnoMetrica Institute of Policy and Politics (IBD/TIPP) is publishing its monthly Economic Optimism report. While not traditionally carrying a heavy impact, it is the most significant release coming out of the United States today and could therefore have a greater impact. Should today's news be USD positive, the consolidation of the Dollar against its primary rivals could come to an end and the bullish movement of the greenback may likely continue.
EUR - EUR Bearish Despite Recent Uptick
The EUR seems to have sustained its bearish momentum despite yesterday's brief upward tick. With a stellar performance against the Australian and Canadian Dollars, the EUR actually finished Monday at the 1.5795 and 1.4680 price levels, respectively. Economists remain weary, however, given economic worries surrounding member nations of the European Monetary Union (EMU).
The reason many analysts claim that downward pressure still exists on the 16-nation European currency is because Greece's plan to tighten its spending has created some concern that the current plan doesn't do enough. Moreover, Portugal announced that it would increase its government's spending options, which has a number of market participants unnerved.
