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Not-So-Great Expectations for the EU Leaders' Summit

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Debt crisis? What debt crisis? The EU leaders want to work on their competitiveness pact at their March 11 meetup. Expect the euro to continue slipping.

On the eve of the EU leaders' annual summit, one member country is on the brink of requiring financial aid while others are sagging, and two are already in public-assistance mode. It seems like a great time to discuss....a competitiveness pact.

Yes, European officials are signaling that they will spend much of their time at the upcoming meetings trying to agree on a plan to boost cooperation between European economies and bolster competitiveness. Even that plan is a watered-down version of the original proposal put forward by France and Germany. At most, the leaders are likely to take baby steps toward any kind of comprehensive aid for peripheral countries, leaving the bigger decisions until later in March. Marc Chandler, global head of currency strategy at Brown Brothers Harriman, described the European leaders' approach to me as "milquetoast."

Rebecca Patterson, global head of currencies and commodities for J.P. Morgan's private bank, took a similarly dim view of the upcoming meeting. "While we believe they will agree on some issues, there is equally likely to be a lot of disagreement," she said. "The lack of "bold moves" to help the periphery could disappoint and take the euro lower into the weekend."

If the euro won't be helped by the meetings, where can traders go? Chandler expects the dollar to continue to gain ground, partly because traders are more negative on Europe's handling of its debt crisis but also because he thinks some short dollar positions are being covered. All in all, should be an interesting couple of days.

CURRENCY FUTURES

Tune In: Beginning March 11th, CNBC's "Money in Motion Currency Trading" will air on Fridays at 5:30pm.

"Money in Motion Currency Trading" will repeat on Saturdays at 7pm.