From the January 01, 2007 issue of Futures Magazine • Subscribe!

What euro strength?

“The market has been trading on anticipated weakness of the U.S. economy rather than [its] actual strength,” says Joe Trevisani, chief market analyst for FX Solutions.

In December, European Central Bank President Jean-Claude Trichet said he was “closely monitoring developments,” language that has presaged rate increases. But he then waffled about a January hike. A pause in the campaign to raise rates would knock down the euro. Trevisani picks 1.2950 for a bottom and 1.3350 for a top.

With China talking diversification and Treasury Secretary Hank Paulson and Fed chief Ben S. Bernanke in China to ease a trillion-dollar sell off, Bob Kozak, an analyst at Alaron Trading picks a high of 135.00 and a low of 130.50.

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