According to S&P’s forecast for the eurozone economy, the current economic instability in the region will last till Q3 2012. The eurozone economy will start recovering in late 2012.
The economies of Germany, France and other key eurozone members will resume their growth while the debt-ridden peripheral economies (Spain , Italy, Greece etc) are expected to stay in recession.
S&P experts say that a gradual increase in the demand shown by emerging markets will contribute to the eurozone’s economic recovery on condition that the financial authorities preserve their easy money-and-credit policy.
At the same time, they say that the recent credit auctions held by the ECB managed to provide considerable support for European banks and improved investment confidence in them, which is confirmed by lower T-bond spreads.
According to , the 6E futures contract (EURUSD) is trying to consolidate above the 1.3150 resistance. However, the bears seem to be dominating the market right now. The trading volume is low, which means there are no major players in the market. If the demand growths the price may test 1.3200. Otherwise, it may overcome the local low.
