By: Barbara Zigah
In spite of recently recouping some earlier losses, the common currency Euro is expected to continue to be put under pressure; investors believe it is likely to remain within striking distance of the 3-week low struck yesterday. This follows media reports surrounding Germany bank WestLB which was ordered by the European Commission to present a viable plan for asset restructuring today, or face the threat of closure. As reported at 1:43 p.m. (JST) in Tokyo, the Euro edged up against the U.S. Dollar, trading up .2% at $1.3511; yesterday the Euro briefly traded at $1.3428, a 3-week trough.
Also putting pressure on the Euro are resurfacing worries over Eurozone fiscal troubles, and the apparent absence of details for shoring up the current rescue fund. Looking to the future, however, at a recent Eurozone finance ministers meeting it was agreed that a new rescue mechanism would be established after 2013, to be funded with €500 billion.
Market players expect that the U.S. Dollar may see some gains today if the retail sales data comes in positive. Some suggest that given the recent encouraging indicators, the Federal Reserve might now be more inclined to consider an interest rate hike, once the quantitative easing schedule has concluded.