The risk appetite is still containing the market sentiment putting pressure on the greenback capping its progress since the release of US Labor report of February last Friday which has shown a losing of just 20k jobs out of the farming sector. The equities market could keep hardly the gains of last Friday in the recent few days moving in sideways. The recent data has shown that the growing pace in US is still gradual while it is struggling in Europe which put further pressure recently on the single currency which gives the traders the reasons to sell it again. We have seen yesterday the germane trade balance of Jan coming at just 8.7b euros while the market was waiting for 16 from 16.7 in December and these data came after a slower than expected release of the germane total industrial productions of that same at just .6% while the market was waiting for 1% after falling in December by 2.6%.

In the same time, there is no new major change of the European situation concerning the Greek debt reforms waiting for a change from Greece which is actually suffering streets riots on these reforms to hold back its current unsustainable deficit which has become 12% of its GDP while it is required now to be back below 3% on Maastricht treaty while it is widely around 6% in Europe at the current struggling growth rates which resulted from the credit crisis even the ECB could not stop any of its accommodative easing actions worrying about the current nascent recovery until now keeping the interest rate at 1% again last Thursday for a whole year which is undermined the single currency which could close hardly again above 1.36 last week is still unable to get above 1.37 which is forming now the upper band of its side way range versus the greenback which is holding while it is lower one is still at 1.344.

God willing, it is important to wait today for US trade balance of January to be -40.3 b$ and tomorrow for US retails sales of February to be up monthly excluding the auto sales by .2% and flat broadly with auto sales and US University of Michigan consuming sentiment preliminary reading to be 73.5 from 73.6 in February.

Best wishes

FX Consultant

Walid Salah El Din
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