Busy Week For The US Dollar

The Euro has opened lower this morning, sitting below the critical 1.30 barrier as markets remain nervous as to the steps that the Eurozone will take to curb the crisis. In major trading, the US Dollar managed to gain further strength last week trading to a low of 1.2860 at the end of 2011, which was the lowest in the final quarter of 2011. Data from the region, saw manufacturing figures come in from France, Germany and Switzerland, which was higher than previous months for all countries, though not reflecting a drastic expansion as it lay below the median figure of 50.

With regional banks stepping up their deposits in the ECB, panic had started to set in, but the announcement from the ECB last week that these deposits were receding, have calmed fears momentarily. We have had some positive data from Germany, as far as unemployment figures go, pushing the Euro towards the critical support level of 1.30 against the greenback. As we go into the week, we expect further data from Europe on Services PMI and construction figures, which will lend to trading patterns of the Euro, intermittently.

We are straight back into a busy week for the US Dollar with ISM manufacturing out this afternoon along with the minutes of the previous Federal Reserve meeting from the 13th December. On Friday the US non-farm payroll number is also released, with the consensus for around 150K jobs being added over the previous month.

Today also marks the official start of the presidential elections with the voting beginning in the first republican primary in Iowa. A victory by the favorite, Mitt Romney may mean the race is over before it began with Mr Romney holding a 20 point lead in the next state to vote, New Hampshire.