- Fitch agency
After a 150-pip rally on Thursday the most traded currency pair remained stable slightly below 1.37 level and as the profit-taking eased back to 1.367. The only important event that happened on Friday was the Fitch Ratings company's decision to affirm Germany's credit rating at AAA keeping a stable outlook, citing a drop in the debt level as the main positive sign for Europe's largest economy. Moreover, according to the agency the new coalition government is committed to reduce the level of public debt further. German politicians already mentioned that they are planning to achieve structurally balanced budget this year and a headline balanced budget in 2015.
The 18-nation bloc started this year on a solid footing with activity in the manufacturing and services sectors posting solid growth, and being marred only by an ongoing contraction in France. Nonetheless, the upturn is broad-based, suggesting the economy can beat official projections this year. This week official data will unveil Europe's inflation and unemployment figures for January and December respectively. While the economy is gaining momentum, too strong domestic currency can become a massive drag on European exporters, hence weaker-than-expected data can provide Mario Draghi with more room for further easing.
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