After the EU member has reached a deal with the IMF for helping Greece to over come its unsustainable debt problems, The market is focusing now on the debt position in the other members which have faced recently a downgrading of their debt rating such as Spain and Portugal which are still looking in better conditions than Greece and have not reached the point of the need of an inevitable aid to face their debts requirements through the financial markets in a normal way. We see now that the worries about spreading the debts problems in other countries in the euro area have just eased with the EU members looking for a certain joint rescue plan or European mechanism for solving these financial problems out to store confidence in the Euro zone financial stability outlook again which lightened the pressure on the single currency which reached 10 months low reaching 1.2367 last Tuesday amid concerns about the EU summit results and it is now trading above 1.34 having strong opening this week with a gap above 1.348 but it could not find a place above 1.35 versus the greenback but it is still well- supported above 1.342

The market sentiment toward holding the single currency is in need now to get that the worst has become behind of us and is not yet ahead of us to underpin the single currency again which is not yet materialized yet to the market who is still watching a very slower pace of growth in the euro zone comparing with US after the credit crisis negative impact on the EU economies which pushed the governmental spending up forcing for spurring investment and growth on the account of their budget deficit which is threating the market confidence and the recovery itself right now with market focusing on the consequences of the debt building in Europe and in this same time, the ECB is still unable to take any tightening action keeping the interest rate at 1% for more than a year even after the realized financial stability in US which is getting  readiness to take tightening actions later this year as widely expected underpinning the greenback which is looking having a brighter interest rate outlook differential now especially, if it can have strong added jobs number to its non-farming sector in March as it is widely waited to be released above 150k by the end of this week as the market is anxiously waiting to see a bottoming out in the labor market to start pricing on a sooner than later action by the fed which has highlighted the need for recovery in the labor market which is still reacting by a gradual way. It is also important today to wait for US consumer confidence survey of March which is expected to be 49.5 from 46 in February and US ISM manufacturing index of this same month to be 56.5b as February.

Best wishes

FX Consultant
Walid Salah El Din
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