Shoppers looking for bargains aren’t the only ones buying on “Black Friday”, as buyers of EUR have brought the currency above the 1.2900 level in overnight and early European trading. Adding to the positive feeling on the EUR, German business confidence rose unexpectedly in November from a 2 1/2 year low.
The Ifo business climate index, which is based on a survey of 7,000 executives rose to 101.4 in November from 100 in October. Economists had predicted the number to fall to 99.5. This is the first gain in eight months and may be signaling that Germany’s economy may be looking to rebound. This is quite a change as recently the German economy was said to be heading into recession. Adding to the positive feeling on EUR, French business confidence rose as well today.
In other news regarding the EUR, the expectation of finally achieving a deal on Greek debt on Monday has also helped support the single currency. According to European economics commissioner Rehn, he sees no reason that negotiations shouldn’t conclude and allow Greece to receive the bailout funds.
While the US markets were closed yesterday for Thanksgiving and many traders will be off today as well, limiting liquidity in the markets, there is a report that the rebuilding effort necessary in the Northeast due to Superstorm Sandy, will actually increase economic growth in the US by 0.5% next year. It is estimated that the damage caused by Sandy, including lost wages and sales may total as high as $50 billion. This will probably reduce economic growth in the US in the fourth quarter, but increase growth in the first quarter of 2013, when most of the rebuilding will occur.
Expect a slow trading day, as many companies remain closed for the Thanksgiving holiday. The EUR will show a positive weekly close and should remain supported above the 1.2880 level. Resistance occurs at 1.2920. A quiet day with a small trading range as we head into the weekend.
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