Vasilis Tsaprounis
Independent Analyst
The European single currency slips slightly below 1,06 level for the second time in the last 24 hours as the US currency continues to be in the spotlight.
The European currency is really struggling to limit its losses as the reaction from yesterday afternoon when it again fell marginally below 1,06 was very limited and has so far failed to extent the correction.
Yesterday's agenda did not give any surprises, the data on the European economy that were announced kept the concerns on the table while on the other side of the Atlantic various statements by Fed officials kept the familiar rhetoric.
Υields on US government debt securities remain at high levels, which further supports the US currency, but showing some signs of stabilization.
10-year notes, which act as a barometer for yield levels, are trading near 4,43 down slightly from 4,48 level a few days earlier.
I maintain the view that current levels are quite high and we are likely to see further tapering relatively soon which could act as a catalyst for the European currency to find cause for correction.
The aftermath of the Presidential elections in US and the triumph of Donald Trump alongside with the political developments in Germany remain high on the agenda, negatively affecting the European currency.
No changes in bets on interest rates outlook as some good chance for 25 basis points cut from Fed in December remains on the table while the landscape is relatively cloudier from the European Central Bank side.
Today's agenda is monopolized by US with the consumer price inflation index standing out as there is nothing of substance on the Old Continent.
Τhe European currency although it is in the corner seems to be fighting for the critical level of 1.06 and despite the small retreat below it, the level is not considered to have collapsed yet.
I continue to maintain a conservative approach and although I feel that signs of a reaction of the European currency will appear on the table soon I prefer to remain on hold.
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