With no news releases for either the euro or dollar today markets have continued to focus on the issue of sovereign debt and speculate whether the euro can survive this current (which of course it will).  Moreover, the remainder of the week is a relatively thin one for tier one fundamental news both in Europe and the US.  Tomorrow, Tuesday, there is virtually nothing other than some some minor news from Germany with final CPI and trade balance figures, the first will have little impact as the preliminary were released 15 days ago.  The same applies to the US.

Wednesday is a little more exciting with French industrial production figures due for release in the morning with the number forecast at 0.6%%, down on last month’s figure of 1.1%.  This data is generally considered to be a leading indicator and should the actual be better than forecast then this may provide a small lift for the euro.  The more important numbers for the euro to dollar come in the afternoon in the US with the release of the trade balance figures which are forecast to come in at -35.7bn against a previous of -36.4bn suggesting that there is a small fall in exports and the only other item of key news comes from Capitol Hill where Fed Chairman Ben Bernanke is due to testify to the financial services committee on the unwinding of the federal reserve emergency funding (aka the “punchbowl”).  The testimony, as usual, comes in two parts with the first in a prepared statement followed by a question and answer session.  It is during this question and answer session that we can expect a degree of volatility.

Thursday’s key numbers are once again in the US preceded in the morning by the ECB monthly bulletin which provides data on the latest interest decision along with a detailed analysis of current and future economic conditions from the bank’s perspective.  In the afternoon we have three items from the US starting with core retail sales, retail sales and finally unemployment claims.  The first two are forecast to come in at 0.4%, both moving into positive territory following last month’s negative figures and the unemployment claims are also forecast to show an improvement, down 22k to 458k.  If these numbers come in as expected then this could add a further boost to the dollar.

The week rounds off with some important data for the euro with the release of preliminary German GDP.  As Europe’s largest economy this number has the power to move the market and the forecast this time is for 0.1% against a previous of 0.7% suggesting that the German economy probably stagnated in the fourth quarter of 2009, ending a dismal year.   Finally we have the preliminary UoM (University of Michigan) consumer sentiment number which provides a view on economic sentiment based on a survey of around 500 consumers with a forecast for 74.7 against a previous of 74.4.

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