The ECB (Euro Central Bank) did not cut rates this week. (ECB) Euro rates will stay at .75 for the time being. There are people who think the euro zone will cut their rates, if they cut it 25 basis points, they would be equal to the Great British Pound rate of .50.
2013 Forecast: Gloomy
President of the ECB Mario Draghi has made it clear that 2013′s euro economy is expected to shrink. A 0.3% shrink in the economy is what is currently expected for 2013. Only three months ago the forecast was a 0.5% gain.
Recently, the business confidence for Italy, Greece, and France have shown positive figures. This may give some hope to the euro zone but will likely not contribute any long-term success, especially with Italy’s political tensions increasing.
It’s said that a team is only as strong as the weakest link. That isn’t always the case, but there is some truth in that statement, and Greece appears to be the weakest link. It is no surprise that Greece is hurting, maybe that is why Draghi said “the most important thing” is to get money to lend to Greece so they can meet their budget goals. If Greece’s economy was booming, imagine the morale boost for the euro. A Greece comeback seems likely at this current time.
The EURUSD is looking very bearish. Currently, the EURUSD is hitting 1.296 support. If the Euro breaks through this level, it could follow through for quite some time as the Technical and Fundamentals confirm each other.