Euro is out of consolidation - 24.11.2011

US Dollar The dollar steadily strengthened on Wednesday, against the risk aversion caused by the Chinese reports and European problems. The dollar index against major currency basket has stopped at 79, being enforced by 1 precent. Further strengthening of American currency is questioned due to problems at Uncle Sam’s. The next two days promise thin and volatile market. Euro Problems in the EU finally put the region's currency from the long-term consolidation down. The European Commission President - JM Barroso presented a plan for tighter budget control and launching of common Eurobonds for the Euro zone yesterday. The reaction of the German leaders to these proposals is still negative. Germany is concerned that the result of the introduction of such a structure will align debt rates of Germany and peripheral countries, and the latter ones will reduce incentives for responsible fiscal policy. At the same time, as it has been shown in the results of today's auction on German bonds placement, the growth of financial risks in the Euro zone is already reflected in the reduction of demand for the most reliable debt instruments of the European region. Germany was able to place only 60% of the proposed loan. It is clear that the discussion of issues for Eurobonds affected the investors activity in this case , however, the risks of expanding the EMC range, which were affected by debt instability including the base countries of the EU are now becoming increasingly obvious. Against this background, the leaders of Germany have to make a choice in the foreseeable future: either place a large and relatively rapid integration for countries in the Euro zone, or the tendency of the Union decay is occurred. The second option, based on the report issued by German leaders, also does not sympathize the government of the country. Anyway, the Euro will be under pressure for a long time. Canadian dollar During the trading session, Looney has reached for a six-week low against American rival, with a help of worsening of an anti risk sentiment after the failed auction on German bonds, which caused a massive sale of high-yield assets. Officials said that the Bank of Canada will keep interest rates at 1% for a some time because of European events .