European woes continue to remain in the spotlight, and it is unlikely that the lens will change focus in the near term as ballooning budget deficits in the 16-member euro area continue to rattle the markets. Indeed, Europe’s outlook seems to progressively worsen week by week, and we may see the bloc slip back into recession by the end of this year.

Talking Points
• Euro Defines “the Unholy Trinity”
• Concerns increase of Double-Dip Euro-zone Recession
•...

The Euro maintained the short-term rally from earlier this week and pushed to a high of 1.2140 during the overnight trade, and the exchange rate may continue to trend higher going into the U.S. trade as European policy makers hold an improved outlook for the region.

Talking Points
• Japanese Yen: Loses Ground Against Most of the Majors
• Pound: Industrial Outputs, Manufacturing Unexpectedly Falters
• Euro: German Wholesale Prices Top Forecast
•...

The British Pound pulled back from a weekly high of 1.4765 as investors scaled back their appetite for risk, and the exchange rate may continue to trend lower during the U.S. trade as market sentiment falters.

Talking Points
• Japanese Yen: Loses Ground Against the Majors
• Pound: Mortgage Approvals Expand for Second-Month
• Euro: Producer Prices Rise More-Than-Expected
• U.S. Dollar: Pending Home Sales on Tap

Meanwhile, the European...

Though the past week was characterized by a few volatile swings in risk appetite, the capital markets nonetheless find themselves pushing towards new bearish extremes. For the US dollar, this uncertainty and pessimism bodes well for two reasons.



The Economy and the Credit Market

Though the past week was characterized by a few volatile...

US Dollar Forecast Remains Bullish Amidst Large S&P 500 Declines
Euro: Will a Delayed Fear of Collapse Allow for a Recovery?
Japanese Yen May Give Back Gains As Fears Subside
British Pound Could Benefit From Upward Revision in 1Q GDP
Canadian Dollar Likely to be Subdued as Traders Await Rate Decision
Australian Dollar Forecast to Decline Further Amidst Market Turmoil
New Zealand Dollar to Get Slight Bounce from Risk Appetite
Gold’s Future Dependent not on Risk Trends but Sovereign Credit Fears...