The euro declined against the dollar on Thursday as concerns about Europe’s debt problems outweigh hopes for interest rate hike by ECB. It is also of concern that raising the interest rate ECB might provoke the next wave of debt crisis in Europe. In the meantime, investors are expecting European leaders’ meeting on Friday and bank stress-tests planned on the next few weeks.

During the next weeks the attention of market players will be concentrated on debt problems, as European leaders and Ministers of Finance will have a series of meetings devoted to these issues.

The euro was under pressure amid surprisingly bad data on China’s foreign trade. According to the Thursday’s data by Custom Administration, China’s export advanced by 2.4% y-o-y in February, which is considerably lower than January’s 37.7% and economists’ estimate (25.9%). These results were conditioned by the lunar calendar New Year. Nevertheless, the data turned out to be quite shocking and forced the investors to sell the euro. The dollar is supported by rising unrest in Libya.
 

Today US foreign trade balance data and federal budget balance data are due.