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The EUR traded to new lows early on Monday but was able to bounce back and push itself at least into stronger parts of its intraday ranges. The EUR found some stability as Hungarian officials stepped forward and said that they had essentially been ‘misunderstood’ regarding the depths of its financial concerns. The Hungarian financial minister pointed out the country believes they can manage their fiscal environment without further need of assistance and maintain its stated budget. The E.U. is also holding talks in order to formulate its debt rescue plan with a ‘super fund’ that would back nations who face a monetary crisis. The question that investors are asking more than anything is if the EUR has found its fair value and if enough of its ‘premium’ has now been priced out of the Single Currency due to the Sovereign Debt issues. Fed Chairman Ben Bernanke gave the EUR his own backing last night, and said he believes the E.U. will act in a coordinated fashion and the EUR will remain a viable currency. German Industrial Production figures will be brought today, but investors may pay as much attention to strikes going on in Spain as these economic numbers. The EUR remains a currency with plenty of questions and risk sentiment will hold sway again today.

A new act in the theater of the absurd for the EUR erupted on Friday when Hungarian officials publically said that they might have a difficult task meeting debt obligations. Hungary does not use the EUR but it has had its government spending backed by the E.U. in a massive undertaking and the reports of impending doom shook the marketplace. The EUR moved lower as the news made its way through the news services and the Single Currency promptly sank to new four year lows. Over the weekend Hungarian officials tried to back pedal from their pronouncements and said that the statements were not correct. German Factory Orders data will be released today, but the impetus for EUR traders will remain all about risk sentiment. One of the problems that the EUR is now facing among investors is a question of legitimacy as concerns continue to cascade regarding the lack of transparency and inability to put one coordinated plan of action into place for the European Union. Short term versus long term trading are two completely different birds, but traders looking to take advantage of the volatile range of the EUR will have to be on their toes.

The EUR struggled to the weakest part of it range against the USD as the Single Currency was once again hit by negative news and poor data from Europe. The broad Retails Sales for the continent turned in a minus 1.2% compared to the expected gain of 0.1%. The EUR also continues to get rocked by reports that are coming from various governments and financial institutions that are expressing concerns regarding budget shortfalls, austerity measures, and the combined implications of poor growth and credit worthiness. Europe will release its Revised GDP today and the anticipated outcome is a gain of 0.2%. The EUR finds itself at lows against the USD and going into trading today will be tested by the nervous sentiment which surrounds the Single Currency and the dollar centric data coming from the U.S. jobless report. Risk appetite will be a key ingredient going into the weekend for the EUR and traders will have decisions to make based on emotions and fundamentals that are springing forth quickly.

The EUR continued to face pressure on Tuesday in a cautious market. With full volume returning to the marketplace as traders from the U.S. and U.K. made their way into offices, the Single Currency has found that it still faces the wrath of many questions from international investors who have not been convinced by many of the pronouncements from European governments and officials. In essence, the blizzard of pronouncements from various nations and autocrats has proven to have brought upon even greater concern, because many of the proposed plans do not exactly follow a cohesive formula, and in fact show that there is disagreement among important players in the Sovereign Debt picture. German Retail Sales were released yesterday and they actually came in slightly better than expected, but the gain of 1.0% was not much to write home about. Today will be relatively quiet with statistics from the E.U. and the crux of attention will be on the debt situation and the implications that this poses for the prospects of growth on the continent. The EUR continues to face headwinds and is near the lower end of a weak range versus the USD.

The EUR traded in a languid manner on Monday as both the U.S. and the U.K. were closed on holiday. Range trading was in full view for most of the day and it will likely fall on today’s market participants to test their risk sentiment on the heels of the Spanish downgrade on bonds by Fitch. With a day of full volume facing it, the single currency may begin to get a real taste again of the outlook investors are holding. The EUR has clearly struggled the past month against the USD and plenty of hurdles still abound. The Sovereign Debt crisis has certainly not gone away and while investors already had their doubts about Spanish debt, the question is if this story will continue to develop new wrinkles. Exposure to the European bonds under scrutiny has still not been firmly established and there are legitimate worries concerning what would happen is any type of debt restructuring were to take place. German Retail Sales figures and the Final Manufacturing PMI for Europe will be released today. Europe faces many questions concerning its ability to achieve legitimate growth under the current shadows and today could prove a stern test for the EUR.

The Sterling continues to languish against the USD. There were no major economic reports on Monday and the GBP essentially mirrored the declines of the EUR. Today the Revised GDP figures will be released from the U.K. and a gain of 0.3% is forecasted. Also the new coalition government will have their legislative agenda presented today. Thus, even though the GBP has certainly been in the shadow of a EUR centric storm, today’s data and news generated from the U.K. could be enough to create its own impetus. If the GDP provides a negative surprise this could spur on the cautious sentiment which already exists regarding the Sterling because of doubts that persists about the U.K.’s growth prospects. Traders may find more volatility today in the GBP.

The EUR found a resting place in the afternoon on Wednesday as it bounced off of new lows it had made against the USD. The focal point for investors remains the crisis in Europe on how to manage its Sovereign Debt situation. It appears that Germany and France are not exactly in agreement on how to handle all aspects of this financial breakdown. Officials from both sides have made conflicting statements regarding policy, regulations, and their overall sentiment regarding the implications for the EUR. There was little in the way of economic data from Europe yesterday and there will be little today. Tomorrow a parade of PMI data will be brought forth from France and Germany. However the dilemma for investors today and tomorrow will be how to judge the ongoing dynamics regarding the manner in which the E.U. publically manages expectations. Also it should be remembered by traders that some nations in Europe may in fact favor a weaker EUR in order to spur on better export conditions. The EUR continues to find turbulence and will likely find a difficult path today.

Volatility continued for the EUR on Monday as the single currency gained strongly out of the gates but slumped back to lows as the day progressed. Investors showed that their moods regarding the EUR remain on a razor’s edge. Early positive sentiment after the announcement by the E.U. to create a fund that would serve as a safety net for bond stability proved short lived as questions emerged. With little in the way of economic data to really move investors off of their attentive gaze regarding Sovereign Debt and the ability of the E.U. to manage their affairs – the EUR has traded in a whirlwind. Today will be light on data with only German inflation (or deflation as the case may be) figures due. Economic releases from the E.U. have been mixed at best the past few weeks and when the time comes for investors to focus on fundamental data again, they might find themselves concerned for the prospects of a genuine recovery from the continent as well. Part of the reason investors lost some of their positive attitude after the weekend’s announcement that the E.U. was firmly behind the EUR was because German officials have made rather tentative comments about the way in which it (meaning a large part of the E.U.) will actually examine and act regarding debt structures. While it appears that some investors feel the plan may work, there does seem to be evidence that not all are believers yet. The EUR continues to find itself under pressure and its trading must be closely watched.

Volatility grew in a manner on Thursday that is rare even for experienced investors. The broad market place could be politely described as being in disarray. The use of hyperbole must be looked at skeptically at all times, but yesterday’s trading results clearly indicate that traders are more than a little nervous. The USD gained in bold moves against the EUR and GBP and the markets remain fast. It should be quickly pointed out that today the Non Farm Employment Change numbers are on the schedule. Usually these figures are considered the highlight of the month, however given the widespread distractions going into today’s sessions it can only be guessed at how exactly the outcome of the jobless release will affect the market. Wall Street suffered another steep decline yesterday. As to why the markets are experiencing such widespread volatility, Greece – is the word.
 
Weekly Unemployment Claims were released yesterday and they came in slightly more negative than estimated. Today’s Non Farm Employment Change is expected to see an improvement in jobs added. However the question that will be the overriding point Friday is whether or not yesterday’s chaos that broke out in the currency and equity markets will result in another tumultuous day. The concerns regarding Sovereign Debt in Europe cannot be underestimated in terms of creating negative sentiment. Investors are now becoming fearful of contagion within the debt markets and how this would affect the global financial institutions. Having said that, it must be judged carefully if the moves seen in the markets including the USD have been an overreaction or based on logic. Traders proved to be on a razor’s edge yesterday and there can be little doubt that today could prove to be a whirlwind too. The USD has clearly been designated a safe haven bastion thus far this week.

Instead of calming the markets on Thursday, ECB President Trichet created a firestorm. When asked if the notion of buying European Bonds by the ECB had been considered, Trichet basically answered that this idea was not even discussed. The EUR sank against the USD like a rock against the USD and its tumble this week is still looking for a place to stop. Investors punished the markets based on a clear lack of substance by the ECB and the belief by many that the Central Bank seems to have their collective heads in the sand. Germany will be voting on the bailout package for Greece today and needless to say the market needs to see the measure approved for any chance of stability to return to the EUR. Having said that the fear is no longer only Greece, what investors are openly questioning now are the debt instruments of Spain and Portugal. Greece is a small player internationally, but the possibility of it setting off a domino effect on European Banks and E.U national debt cannot be taken slightly. Going into the weekend all eyes will be on whether some form of tranquility can enter the markets for the EUR. The Greek financial crisis story will remain in the spotlight.