Analysts at Rabobank note that proposed extension of tax cuts in the USA may be stimulating the greenback’s rate now, but will set a base for US dollar’s decline in 2011. Assuming that global economic growth will keep accelerating next year and the market’s risk sentiment continues to improve, it’s quite likely that US currency will suffer from the negative implications of its twin deficits.

So, if the euro zone countries will manage to move towards the restoration of fiscal stability it will support the single currency. The specialists believe that in 2011 the pair EUR/USD may rise to 1.50.

In addition, Rabobank recommends selling USD/CAD on rallies. The pair may retest its November minimum at 0.9975 if the crude price returns upwards to $90 a barrel. In favor of such outcome there are such factors as speculation that OPEC will maintain its quotas at this week's meeting in Ecuador, the IEA's upward revision to US energy demand and strong oil demand from China.



Chart. Daily EUR/USD



Chart. Daily USD/CAD


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