Monday, 10 Jan 2011

Euro Remains Weak as Further Debt Concerns Arise

The euro remained well below the 1.2950 level against the US dollar in morning trading, largely due to fresh concerns regarding euro-zone soverign debt, this time out of Portugal. Both France and Germany are pressuring Portugal to accept an international bailout before its soverign debt becomes out of control. Investors responded by selling off the 17-nation common currency against most of its main curency rivals. In addition to the losses it took against the dollar, the euro is starting to give back earlier gains made against the yen and UK pound. Currently the EUR/JPY and EUR/GBP are trading at 107.32 and 0.8309, respectively.

Turning to the rest of the day, traders will want to pay attention to the Canadian Building Permits figure and the Bank of Canada's Business Outlook Survey. While the Canadian dollar is still considered a strong currency, it has recently turned bearish against the greenback. Positive news today will likely help the loonie recoup some of its recent losses. The Building Permits report in particular is forecasted to come in with a strong figure, which could send the USD/CAD pair down to the 0.9920 level.