Mario Draghi said on Friday that budgetary consolidation in the euro zone would involve a short term economic impact however currency bloc is on track for recovery which will emerge in second half of 2013. ECB president said in his conference to financial officials that euro zone government should push ahead quickly for implementing the banking union which must apply to all banks to avoid fragmenting the sector. However, Germany is saying that unified supervision under the aegis of the ECB should apply only to bloc’s largest banks.
The euro, which had its month high of 1.3015 on Thursday on optimism that U.S. fiscal deal could be reached, is trading flat today under its one month’s low. Recent gain in euro has also been helped due to fall in Spanish and Italian bind yields in recent weeks but investors do question how far this move in euro can continue given the fragile economic fundamentals of the euro zone.
On the data front, German Retail Sales on m/m basis came at -2.8% much worse then the expected number of -0.3%. French Consumer Spending month on month baisi also came worse at -0.2% than the forecasted number of -0.1%.
Euro Unemployment rate is due at 10.00GMT hours and expected number to beat is 11.7%
Technical Analysis
Comment: the pair has broken above its previous high and should post further advance.
Key levels
- 1.308
- 1.306
- 1.3035
- 1.3017 last
- 1.296
- 1.2935
- 1.291
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by Naeem Aslam