European currencies are gaining momentum at the end of the week against the dollar but without leaving narrow price range.
During the American trading session the euro may come back to 1.30, while the British pound may slash to 1.61.
There is no important news which could be considered from a fundamental point of view. There are rumours that Spain inches closer to seeking a sovereign bailout. Spanish bond spreads could surge if Spain’s premier Rajoy continues to drag his feet on a bail-out request. S&P downgraded Spain's credit rating and the measure could force Spain to ask for bailout which apparently would be well received by the markets. European currencies rose during the last few hours; it reflects the investors discount the Spanish request for help.
However, there are no concrete facts that influence exchange rates in these hours. Next week there will be held a meeting of the EU leaders. There are many expectations concerning the summit. Such events do not have a defined outcome as usual; it is used to save time and it is full with good intentions and announcements. Thus, current situation is ambiguous; the markets can be mixed these days.
The Michigan sentiment index was published at 9:55 ET. U.S. wholesale inflation increased by 1.1%, the drop in initial jobless claims, following a very optimistic figure of unemployment rate last week are showing a modest but sustained U.S. economic recovery.