With mixed results against its currency rivals this morning, the EUR may in fact be positioned to lose ground this week. With depreciation against the USD, JPY, and CHF, this European currency may indeed be heading for a reversal to its recent bullish trends.
Last week's low volume trading results and poor economic data now has many analysts predicting that the European Central Bank (ECB) is more likely to introduce another Interest Rate cut in its upcoming meeting. The mere speculation of this monetary policy decision alone has investors pricing in the rate cut ahead of its announcement. As such, forex traders will no doubt see a depreciation of the EUR leading up the ECB's decision, which won't be made public until the middle of next week.
Interestingly, the EUR will no longer be considered a 15-nation currency after this week's induction of Slovakia to the European Monetary Union (EMU). The addition of this rather small East European economy will carry little weight on the overall value of the currency, but its entrance to the EMU may carry the potential to help stabilize the region by kicking off what might become a popular trend for failing regional economies. The number of countries that join will depend on the success of the EUR in the coming weeks.
Glancing ahead, the Euro-Zone faces 2 important events this week. First is the introduction of Slovakia to the EMU, as already mentioned. The second is Great Britain's forecasted Interest Rate decision, set for this Thursday. The Bank of England (BoE) is expected to slash Britain's Official Bank Rate from 2.00% to 1.50% during its meeting later this week, an event which traders will see getting factored into the GBP pairs and crosses leading up to its announcement, and shortly thereafter.