Euro stays above its recent trading range

The euro managed to stay above its recent trading range of $1.40 to $1.43 this past week, with the December euro futures contract rising to $1.4396 on Friday from $1.4311 a week ago, a gain of 0.85 cents. The gain was probably drive by an expectation that the Fed would be cutting rates again on Wednesday.

Where the euro goes from here is up in the air since we no longer have a solid consensus on what the Fed will do with interest rates, where the overall U.S. economy is headed, or how deep-pocketed the speculators are who have been pushing up the euro.

As far as where speculators think the euro may be headed, euro futures out at March 2009 were only at $1.4405 on Friday, so there isn't exactly a lot of "slam dunk" enthusiasm for betting on an aggressive ongoing upwards trend, so far.

The good news about the decline of the dollar is that it puts downwards pressure on imports and upwards pressure on exports which combine to put upwards pressure on GDP. It also puts upwards pressure on the revenue and earnings of multinational companies.

-- Jack Krupansky