Risk aversion is keeping the euro under pressure against the euro to dollar today, and strategists expected the euro to soon revisit its October lows of 1.2330, and as I suggested yesterday, we could see a move lower to 1.18 in the next few months. The main fundamental news today is in the US with no data scheduled for Europe, and the highlight of the day will be Bernanke due to speak about Fed’s lending programs and its balance sheet at the National Press Club, in Washington DC. As I mentioned in my weekly roundup, the most interesting part of the event, is not the speech itself, but the questions and answers that follow, which often provide a greater insight into the FED’s views, as the answers are unscripted and therefore cannot be prepared in advance. This can often provide some clues, carefully removed from a scripted speech, and hence the reason we often see volatility in the markets, once the Q & A session starts. This is followed by the minutes of the most recent FOMC meeting, which provides an insight into the economic conditions that influenced their vote on where to set interest rates ( if any were needed!)

Earlier in the day we have the Building Permit figures which are likley to show a fall from last month of around 30,000 to 520,000 – again this is hardly a surprise as this provides evidence of a further slowing in the already weak economy. If the actual is better then forecast then this could lift the US dollar against the Euro. The US dollar is now seens as a safe-haven currency, having entered an upward trend, with  investors’ needs for such currencies increasing as rating agencies recently are increasingly warning of the exposure of major European banks to emerging markets.