Christopher Vecchio, Currency Analyst at DailyFX Comments on the Euro

"A growing divergence between the commodity currencies and the European currencies has formed the past several weeks, as near-crisis trading conditions have slowly receded: the tight ‘risk-on, risk-off' atmosphere that saw the majors move in lockstep against the Japanese Yen and the US Dollar has given way to a new dynamic. Now, as has transpired overnight, the Australian, Canadian, and New Zealand Dollars are appreciating relatively to their weaker European counterparts, the British Pound, the Swiss Franc, and the Euro. In Europe, the big news is that the Euro-zone Unemployment Rate ticked up to 12.0% in February (although the January figure was revised higher to 12.0% from 11.9%, technically making it two months at this horrid level), underscoring the likelihood that contraction gripped the region in the 1Q'13. The ECB is scheduled to meet on Thursday, where it is widely expected that they will keep their key interest rate on hold at 0.75%. I suspect that, despite the broken policy transmission mechanism (German and French companies/banks field substantially lower rates than their Italian and Spanish counterparts). As the economic divergence between the Euro-zone and the United States grows midyear, the ECB will be more open to a rate cut, just not now."