EUR/USD opened in asia at $1.2667 after a quiet session yesterday with the US closed for the Martin Luther King Day holiday. S&P’s downgrade of the EFSF to AA+ from AAA came as no real surprise following Friday’s 9 state downgrade. French auctions were well received and the EUR steadied ahead of today’s Chinese Q4 GDP data. Asian markets opened with a firmer tone and the GDP data came out above expectations, sparking gains in equities and rounds of short covering in the EUR/USD. The pair tripped stops through $1.2690 to $1.2737. AUD capitalized on sovereign and leveraged buying, initially taking the pair to $1.0343 and later accelerating on the GDP release to highs of $1.0398 before stalling into offers ahead of a presumed barrier at $1.0400. GBP largely tracked the EUR with a rise to $1.5369 from $1.5310 ahead of UK data inflation data this morning, but lagged the move as EUR/GBP crept up to stg0.8291 from stg0.8262. EUR/JPY recovered to Y97.77 from Y97.15 despite dollar falls to Y76.68 from Y76.88. EUR/CHF hovered around chf1.2100 as USD fell back to chf0.9497 from chf0.9575.
EasyForexNews Research Team