EUR/USD Daily Fundamental Analysis for May 23, 2011
The EUR/USD will start the week with caution and volatility after ending the previous week on Friday under downbeat and negative pressures.
Last week, the euro managed to end with some gains to cut back on the weekly losses seen in the previous two weeks, ever since Trichet extended any monetary tightening beyond June.
The euro was merely bolstered slightly by the passed bailout for Portugal, whereas the resolution on the Greek crisis was not seen and likely to return to haunt the euro soon. The euro is under heavy pressures as is the market with the growing pessimism over the outlook for the global recovery, which in role is keeping the dollar strong.
Haven demand is supporting greenback and keeping the euro burdened with its debt woes. This week the sentiment is likely to concentrate on the growth outlook while in search of any new developments on the Greek crisis.
The start of the week will be with euro area’s sectors performance in May as investors are downbeat already over the outlook for the slowing global recovery. Germany will start with the Flash PMI estimates for May at 07:30 GMT. The manufacturing PMI might have slowed to 62.3 from 62.9 and the Services might have eased to 61.3 from 62.0.
The euro area Flash PMI May estimates are due at 08:00 GMT the Manufacturing is expected to slow to 57.6 from 58.0 and Services also slower to 56.6 from 56.7.
The U.S. is not due to release any fundamentals on Monday and accordingly leaving more room for speculation and volatility ahead of the first quarter GDP revision later this week.
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