EUR/USD will move toward 1.60 by the end of 2010?

The U.S. economy is expected to improve tangibly in 2010, supported by the industrial and housing sectors. In Europe, at the contrary, the economic growth is uneven, but the Euro currency stays well supported over the long term against the U.S. dollar.


U.S.: fiscal and monetary policies at a crucial point


The U.S. economy is expected to improve tangibly in 2010 supported by the industrial and housing sectors. In effect, despite being lowered from previous estimates, the Gross Domestic Product (GDP) was above 2.0% in the final estimates, suggesting the positive growth should stay intact without the government incentives. Consumer spending remained practically unchanged, while government spending was lowered to 2.6% from 3.1%. So, household wealth could begin to rise again, after more than two years of rebates, as the unemployment rate might top next year. The U.S. economy lost only 11,000 jobs lately, the smallest number since January 2008. However, consumer confidence remained mixed so far with the Philly Fed index increasing, while the Empire State and Richmond Fed indices both declining. In reality, spending moved up 0.5% in November. It has been the second straight month of increase and it covered both durables and non-durables. Personal income climbed instead 0.4%, while savings stayed at 4.7% for the second straight month, up from 2.6% shown in 2008. Personal spending rose almost 3.0% in the third quarter, supported by the cash-for-clunkers program.