Euro Within 1 Penny of its Record Highs
The Euro traded within 1 penny of its record highs on fresh fears that another major financial crisis may be around the corner. If it wasn’t for the potential repeat of theBear Stearns debacle in March, we would have a quiet summer.
However US stocks fell to a new 23 month low today triggering another flight to safety into anything but US dollars. Whether the EUR/USD manages to hit a new record high will be less dependent on economic data and more dependent on how much better or worse the market feels about the health of Fannie Mae and Freddie Mac. The latest rally in the Euro helps Eurozone nations deal with the rise in oil prices but it also raises the risk of sharply weaker growth for countries other than Spain and Ireland. Like the US, there are a number of pieces of economic data on the Eurozone calendar that are worth watching. This includes the German ZEW survey of analyst sentiment, consumer and producer prices.