On Wednesday, the pair rebounded strongly as concerns from the euro area enhanced demand on the dollar as a refuge.
Worries increased afterGermanyauctioned 4.06 billion euros of government bonds out of 5 billon euros offered, where the yield on the 10-year bonds retreated to 1.93%, the lowest over the past five years, from 1.98% in November’s auction.
The EFSF is looking forward to gathering as much as 3 billion euros by auctioning three-year bills to finance bailouts for debt-mired euro nationsIrelandandPortugal, where rating agencies are threatening of a possible downgrade of the facility.
Still, there is high uncertainty that euro area debt crisis may thwart global recovery; data from the euro area showed that PMI composite signaled a contraction in manufacturing and services sectors for the fourth consecutive month to 48.3.
The main focus this week is on manufacturing and services data from major economies where investors will track the latest developments in major sectors in the fourth quarter on hopes there will be further improvement in the first quarter of 2012.
On Thursday, amid the absence of fundamentals from Switzerland the U.S. economy will release ADP employment change at 13:15 GMT, where it is expected to decrease to 175,000 in Dec. from the previous 206,000, while initial jobless claims for the week ending Nov. 26 and continuing claims for the week ending Nov. 18 will be available at 13:30 GMT. At 15:00 GMT, ISM non-manufacturing for Dec. is expected to show a widening expansion to 53.0 compared with Nov. reading of 52.0.
The data is expected to affect the pair’s movement due to its high relevance, yet the pair will probably also be affected by the general sentiment.
Originally posted here
