The Euro's freefall continued during last week's trading session. The Euro dropped about 400 pips against the Dollar and about 300 pips against the Pound as well. Yet the most significant slide took place vs. the Yen, as the EUR/JPY pair dropped to the 108.17 level, marking a 9-month low.
The reason for the Euro's bearish trend remains the Euro-Zone's debt crisis. This week's catalyst for the Euro's slide was the concerns regarding the Hungarian sovereign debt. There are concrete concerns in Europe that the European sovereign debt crisis might spread to Eastern Europe as well. The main concern revolves around insuring the losses of these countries, and the Euro-Zone's ability to sustain such losses. In addition, the economic data from the Euro-Zone has weakened the Euro as well. The European Retail Sales dropped by 1.2% on April, failing to reach expectations for a 0.1% rise. The combination of deep concerns regarding the Euro-Zone's future and the negative economic data are weakening the Euro and have potential to weaken it further.
As for the week ahead, the most significant news publication seems to be the Minimum Bid Rate, which is the European Interest Rates announcement for June. Analysts expect the Bank of Europe to leave rates at 1.00%, however any rates manipulations is likely to have a sharp impact on the market. Traders should also follow every publication regarding the European debt crisis as this issue continues to be the main reason for the weak Euro.