Opened in Asia at $1.2940 after lows in NY late yesterday of $1.2912 amid turmoil in thin markets as the dollar rallied from the start of the NY session, despite strong Italian auctions in the European session. Concerns over the Eurozone and press articles on China’s property market in crisis all compounded to keep the EURO under further pressure ahead of today’s key 3 and 10 yr Italian auctions. Heavy EUR/JPY sales into the Tokyo fixing were the initial drivers this morning with the single currency hitting fresh lows of $1.2887 before talk of Asian sovereign demand and some short covering led a recovery back up to $1.2938, led again by the EUR/JPY. Some offers should now be seen towards the NY recovery off yesterday’s lows around $1.2955, with key support down towards the 2011 lows of $1.2860. Main focus this morning will be on the Italian auctions which if resulting in
high yields will likely heap further downward pressure on the pair.
EasyForexNews Research Team