Eric the Economist says

EUR/USD - The dollar has pared back most of the losses from Tuesday, when the pair retreated towards 1.47 after 1.4770 proved to be tough resistance for the euro to break. Euro-zone data was weak Wednesday with retail sales plummeting by 0.7% in October and growth in the dominant services sector slowing to a 2 year low, although the services PMI did come in slightly above last week’s preliminary forecast. Futures markets are beginning to price in increased chances of a 0.5% rate cut from the Fed next week and if US economic data remains weak for the remainder of this week, then the probability of an aggressive 50 basis points cut will increase. Wednesday sees the release of the ISM services PMI for November and the ADP employment report which estimates the number of jobs added in the private sector in November. Two weak reports will put added pressure on the dollar and to be honest it is hard to see how the greenback can sustain any real momentum over the next week, given the underlying risks. The ECB is the main event of this week and if the MPC maintains its hawkish inflation bias tomorrow I cannot but see 1.50 being hit within the next week. We need to be cautious though because we have already witnessed a shift in emphasis from the Central Banks in Canada and Australia over the past 24 hours and with the strong possibility of a rate cut from the Bank of England Thursday, it may well be the ECB will be forced into delivering a softer line because of wider concerns over a slowing global economy. Many traders will stay on the sidelines until after the ECB deliver their statement tomorrow and price movements between now and then may prove to be volatile and misleading. Soft US data though will increase expectations of a 50 basis point cut from the Fed and should see the euro rise to test Tuesday’s highs.