The Euro hit a new record high of 1.4439 today on the back of broad dollar weakness and stronger regional consumer prices in parts of Germany.
Despite the disappointing German IFO report last week, European Central Bank officials have remained mum about the current level of the Euro. To many, this lack of concern has been interpreted as an endorsement for further Euro strength. At this point a test of 1.45 in the Euro seems inevitable. If the currency manages to break above that on the back of bearish US news, 1.50 could be viable. Don’t expect this to come as soon as tomorrow however since all we have are Eurozone retail PMI and German unemployment. The labor market is expected to improve but consumer spending is expected to weaken.