Opened early Europe at $1.2718 EUR/USD closed in NY at $1.2706, having recovered off session lows of $1.26615, with this corrective move extending into early Asia to around the $1.2720 level. This correction was given a slight knock as the PBOC fixed the yuan rate at a higher level than expected, as well as Chinese CPI coming in above pre release offshore rumours, at 4.1%. EUR/USD was pressed to lows of $1.2700 on US investment bank sales but met buyers into the dip, an onshore Chinese corporate a noted buyer (covering ahead of Chinese new year Jan23), with others noting demand from leveraged accounts. Rate traded to a high of $1.2728 before momentum faltered, the market ‘aware’ of decent sized sell interest sitting at $1.2730. Rate settled between $1.2705/25, trading around $1.2715 into Europe. Middle east buying emerged in Europe, taking rate to $1.2743 before a good Spanish auction result extended move to an eventual high of $1.2763. EUR seen firm across the board as it corrects away from recent pressured lows. ECB awaited at 1245GMT.
EasyForexNews Research Team