The Euro stalled as it inched close to $1.3000 versus the U.S. Dollar while Forex investors await an accord on the Greed debt. In the meantime, the E.U. member nations have returned to the agenda set forth by the German Chancellor, Angela Merkel, which calls for stricter fiscal discipline. The most recent draft of the fiscal rules will be the topic of conversation when E.U. Finance Ministers gather today. Economists believe this version of the draft will gain the acceptance of the European Central Bank and it will therefore continue to fund the Euro region’s banks to ensure liquidity.
The Canadian Dollar fell against the greenback as December’s CPI figures weakened the argument for an increase in borrowing costs. The Loonie dropped against the majority of its most traded counterparts on speculation the Bank of Canada will leave interest rates unchanged for as long as the Euro-zone’s debt crisis rages on.
Other money market reports indicated that demand for the British Pound increased as government releases showed that Retail Sales rose in December. The Sterling was also stronger against the 17-nation currency on concerns that Greek officials are struggling to reach an agreement on the debt negotiations, thereby suggesting the debt crisis is not yet under control.
And according to some analysts, the Federal Reserve may implement another bout of quantitative easing this spring in order to spur U.S. economic growth. Currency trading investors will pay close attention to the upcoming FOMC meeting scheduled for January 24th.