The Single currency The Single currency which was suffering recently from the market focusing on the negative impact of the US slowing growth because of the credit crunch on the EU has managed finally to correct some of its losses versus the greenback. The single currency has come down lower than 1.39 forming a reversing hummer sign and visiting 1.41 right now after surprising weak US retail sales came at -3% monthly in August and excluding auto sales the figure came down by .7% in august from unchanged pace in July and a decline of US PPI of August by .9% m/m. today was the first white day after 11 days of decline single currency from 1.4908 to 1.389 which has recorded yesterday.
Technically the pair was expected to find a support at 1.3838 whereas the 50% Fibonacci retracement of the rise from 1.1634 to 1.6037. The decline of commodities and oil prices has underpinned the greenback too across the broad which can be on the market expectation of a decline of demand resulted from the weak growth pace across the globe.

The market has seen increased growth worries from this week ECB monthly report. The ECB has referred to its evaluation of the recent decline of the energy prices and its impact on inflation cautiously and the growth slow down in the Euro zone. The ECB has not referred to a near coming cut but they have left it to the market as the most option to be expected after the recent hike which was to tackle inflation amid the high oil and commodities prices which are declining currently. The ECB was caring of fighting other rounds effects of inflation. The ECB was especially worried about the wages growth which can build up much more inflation forces and cause jobs cuts amid the current sluggish growth. They have not seen inflation stagnation yet in the near term as the latest provided data.

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Walid Salah El Din
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