Euro continues to bounce around within its trading range

The euro remained convincingly trapped in its $1.33 to $1.38 trading range this past week. September futures for the euro closed at $1.3647 on Friday, 0.35 cents below the prior Friday close of 1.3682.

There are plenty of traders and speculators who would like to see the euro break $1.40, but whether there is really a net demand for the euro at these levels remains to be seen. For now, traders and specualtors are waiting patiently to see whether the Fed really will cut the fed funds target rate, which should in theory "weaken" the dollar.

Euro futures out at December 2008 were only at $1.3730 on Friday (compared to $1.3753 the previous Friday), so there isn't exactly a lot of "slam dunk" enthusiasm for betting on a $1.40 euro, so far. And that is evidence that some people are not convinced that fed rate cuts are really coming. It could also be a safe haven bid for the dollar as long as there is heightened global market volatility. So much for the theory that the dollar is "weak."

-- Jack Krupansky