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Markets

Euro Continues To Weaken Amid Debt Contagion Concern

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The main trend in the market continues to be the bearish euro. Over the past month, the EUR/USD pair dropped from the 1.4200 level, and reached as low as the 1.2970 level. The pair recently saw a technical correction, which took it up to the 1.3440 level, yet now the pair is trading below the 1.3200 level once again.

The reason for the euro's bearishness is of course the broad concerns that another member of the European Union will seek financial aid, after Greece and Ireland. The countries which are considered to be at the higher risk-level to reach such a scenario are Portugal and Spain, and the biggest concern is that the euro-zone won't be able to deal with another financial bailout, which will lead to the end of the European joint currency.

On December 16 a summit between European leaders will take place regarding the disturbing situation, and official statements from the summit are likely to create heavy volatility in the market. Until then, traders are advised to follow the updates regarding the European debt crisis, and to take under consideration that the euro might face further bearishness in the near-future.

Here are today's leading news events:

• 09:30 GMT, British Producer Price Index (PPI) Input - This report measures the change in the price of goods and raw materials purchased by manufacturers. It's considered to be a leading indicator of consumer inflation, and thus tends to have a large impact on the sterling. An end result greater than 1.0% might boost the pound .

• 18:30 GMT, Europeans Central Bank President Trichet Speaks - Trichet is scheduled to deliver a speech at the Internationaler Club in Frankfurt. Trichet might discuss the ECB's ideas on how to deal with the current crisis , and heavy volatility is likely to take place during his speech.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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