The EUR/USD fluctuated heavily on Tuesday after S&P issued a new warning for the eurozone members and placed 15 nations under review with a threat of downgrades that might eventually lead to an EFSF downgrade.
Standard & Poor’s was the highlight of the day after the late surprise on Monday that continued into Tuesday with warnings that if the European leaders again fail to produce something solid this week the rating could be cut as soon as that. The agency also placed the top six and grantors of the EFSF under review the triple-A rated Germany, France, The Netherlands, Austria, Finland and Luxembourg could take a hit with one notch downgrade as it said on Monday and followed the warning with another on Tuesday saying the EFSF long term credit rating could be downgraded if the euro zone nations are downgraded and will take the lowest grate of the mentioned grantors.
This is renewed pressure on the market sentiment and on the euro which eased the hope for the summit ahead and increased the risk of its failure as it will further complicate the crisis once the major economies are downgraded and if the EFSF loses its top notch rating!
On Wednesday the anxiety will increase for sure with the eyes on the ECB on Thursday ahead of the summit and investors are really anxious to see what the final decision from Europe will be, are they going to make it or break it once and for all this time.
Germany will start the session at 11:00 GMT with the Industrial Production index for October, where the non-seasonally adjusted annual index is projected to expand by 3.2% from 5.4%, while the seasonally adjusted monthly index could have expanded by 0.3% from the previous drop of 2.7%.
The United States will join the session at 20:00 GMT with the Consumer Credit figure for October, which could have declined to $7.000 billion from $7.386 billion.
Originally posted here