The euro may extend last month’s decline versus emerging markets and commodity linked currencies as the economic recovery expected for the beginning of 2010 may rise appeal for riskier assets, damping demand for the European single currency in
After currencies like the South African rand and the Norwegian krone benefited from a rise in demand for energetic and metallic commodities, the attractiveness for the European common currency suffered another strike, as some of its country members are struggling to adjust their current accounts and stabilize their banking systems. A less appealing euro combined with positive forecasts for a global recovery in 2010 will cause Asian stock markets to rally, rising also demand for raw materials as manufacturing production accelerates worldwide, providing support for the Canadian and the Australian dollar to beat the euro in the
Even if optimism is strong, its not guaranteed that such trends will last for a longer period, as economic recovery pace and the drivers behind it are not well defined and structure, allowing room for the euro to rebound if the current scenario changes slightly.
EUR/AUD traded at 1.5800 as of 20:10 GMT from an opening rate this year at 1.5935.
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