The US dollar is presumed to prevail in the battle of the safe havens today as the failure among Euro Zone finance ministers to clinch a deal over Greek financial aid at a meeting today is seen to weaken the demand for the Swiss franc. Meanwhile, another batch of economic data from the world’s largest economy is believed to highlight the steady pace of the economic recovery.
After nearly 12 hours of talks, Euro Zone officials failed to agree on a deal on giving Greece much needed aid, prolonging the uncertainty over the future of the debt-strapped country and the 17-nation currency bloc. The Eurogroup said that it had made progress on a package of measures to reduce Greece’s public debt, but needed more time for technical work. Jean-Claude Juncker, chairman of the Eurogroup, said that another meeting is scheduled on Monday to try and sort out their differences. Finance ministers are reported to have differed with the International Monetary Fund over how to restore the nation back to fiscal health. Officials are said to be in favor of giving Greece an extra two years, to 2022, to bring its debt down to 120 percent of GDP, but the IMF resists that extension.
Over to the US, buoyant housing figures are once again providing positive evidence that the once-troubled housing market is gaining momentum. Home building inclined in October to its highest rate since July 2008. Housing starts rose 3.6 percent last month to a seasonally-adjusted annual pace of 894,000. Compared with a year earlier, new home construction was up 41.9 percent. Improving consumer confidence is foreseen to sustain the recent strides in the real estate sector. The University of Michigan is estimated to revise its index of consumer sentiment lower from 84.9 points to 84.3 points this month. Nonetheless, the figure is still the highest it has been since July 2007, suggesting still high levels of optimism among American consumers, which in turn bodes favorably for the Holiday shopping season.
Meanwhile, manufacturing in the US is also showing decent gains as Markit is awaited to reveal that factory conditions improved slightly this month. The Flash Manufacturing PMI is projected to incline from 51.0 points to a grade of 51.2 in November, suggesting that steady demand is sustaining growth in the factory sector. In the labor market, the debilitating effects of Superstorm Sandy are seen to be steadily easing as filings for jobless claims are believed to have eased off its 18-month peak last week. Jobless claims are estimated to come in at 415,000, lower than the 439,000 count recorded in the previous release. Amid such signs of improvement in the US economy, the Greenback is deemed to rise opposite the Swissie, warranting a long position today.