Despite the inherent risk in the market due to the Euro debt crisis, the Euro continues to rise vs. USD. But for how much longer? The market is fully aware of all of the potential landmines that could potentially come out of the “resolution” which is due out tomorrow yet the Euro still seems more attractive than the Dollar.
Part of this can be attributed to the removal of the uncertainty of the situation, but the end result may not be exactly what the market is looking for. There have also been rumors of further US Fed easing (QE3) which underlie Dollar weakness.
Regardless of what takes place tomorrow, there is bound to be volatility. My initial thought is that the Euro will strengthen on the announcement to perhaps above 1.40, only to pull-back as the details of the plan are revealed.
Stay tuned for this historic event!