In fact the euro has the wind in its sails

After two weeks particularly negative allowing the euro to appreciate 4.32 to reach its highest level since the month of March 2005, 1,3367 dollar at the meeting Friday, the dollar is slightly back to yesterday. In the absence of major statistics in the United States, currency traders have opted for a few catch benefit.

Later in the day, the European currency is exchanged at 1,3329 dollar and the greenback was worth 115,36 yen (against 115,23 Friday). But this thinning for the dollar would be short-lived. Already, in the second part of afternoon, the euro showed signs of better, after be back until 1,3283 dollar at the meeting.

Certainly, members of the Federal Reserve retained a cautious tone towards inflation. Yesterday, the President of the Chicago Fed, Michael Moskow, found the need to remain vigilant. "We must be very attentive to that inflation remains elevated for an extended period, otherwise it integrates into expectations," he said in an interview on CNBC. With regard to the State of health of the US economy, the central banker is confident: "in the labour market is strong, unemployment is low, productivity high as wages...". "Overall, I think that the economy is strong," he continued.

But statistics are more disturbing. Friday, the ISM purchasing managers index fell below the threshold of 50 points for the first time since April 2003, 49.5 points in November after 51.2 in October. The new led a reinforcement of the expectations of the declines in rates across the Atlantic in 2007. Eurodollar 3 months contract maturity 2007 saw its rate to relax by 13 basis points to return to 4.52. That federal funding has been a movement of same magnitude to 4.43, meaning that the market integrates now the idea of a rate cut of 75 basis points next year. Yesterday, the figures of the real estate gave a decline of 1.7 of sales of current homes in October.

ECB: new round of screw

For planners, the window of shooting for a rebound in the dollar remains close. Because the agenda of the week contains statistics at risk. This is true of the expected Friday in the United States for the month of November employment figures. "The withdrawal of the employment in the ISM index component, and the bond posted the week passed by applications are not good omen", considers and team change of BNP Paribas. The market hoped 100,000 net job creation, after 1.121.775 in October. "A number of the order of 120,000 should maintain the fragility of the dollar", predicted the team of Société Générale. "The main factor of risk from this central scenario being a low report, with property course at the key pressures vendors accelerate."

In addition, if concerns reinforce across the Atlantic, the European Central Bank might opt Thursday for a revision to its projections for 2007 increased. According to the "Financial Times Deutschland", the Institute expect now a growth rate of 2.2 to 2.3 for the next year, against 2.1 so far. Inflation should fall below 2 in 2008. The meeting of the ECB should be an opportunity for a new round of screws of its monetary policy, with refinance rate to 3.50. This could also be the possibility for Jean-Claude Trichet, President of give some clues for 2007. "Expect him to be enigmatic and it keeps all options open", argues John Shepperd, of Dresdner Kleinwort Benson.

In fact, the euro has the wind in its sails. And it was still true yesterday against the yen. The single currency has renewed his record to 154,18 yen, before settling in 153,78 day (against 153,54 on the eve of the weekend). The words of "Mr Yen", Eisuke Sakakibara, according to which the likelihood of an increase in the rate of the Bank of Japan in December is 40, there have not altered.