$EURUSD

	Marc Chandler
	Three FX Drivers Today
	6/3/2011 7:03 AM EDT

There are three key drivers today. First of course is the US jobs data. I suspect that the market is still vulnerable to downside surprises, despite the adjustment post-ADP. Moreover, I think a somewhat stronger than expected report would not have lasting impact as the sense of general weakness of the US economy would persist.
Second, more developments from Greece are likely. After pushing the situation to the edge of the abyss the elite seem intent on pulling back now. That is how brinkmanship tactics are supposed to work (you hearing that in Washington?). Much discussion now over private sector rolling over 2012-2014 maturing Greek bonds. Early estimates suggest about half may be rolled over and this could be worth 7 bln euros this year and around 15 bln euros 2012 and again in 2013. This coupled with new EU/IMF/ECB loans and privatization proceeds kicks the can down the road. That is my point: Yes it is a solvency issue, but yes the European elite have the political will and financial wherewithal to treat it like a solvency issue for a while longer.
The third driver today is risk-aversion ahead of the weekend and amid speculation that China may hike rates.
I suspect these forces are resolved with a weaker dollar and look for the euro to make new marginal highs with the $1.4570 area being the next retracement objective. I look for sterling to return to the $1.6350-70 area and have recommended this week buying both currencies. I like the Austrialian dollar here too. It is near session lows around $1.0650 and stops need to be below $1.0580.