Closed in NY at $1.2559, off a late pullback low of $1.2555 seen after Fed’s Bernanke disappointed markets by failing to hint at imminent QE3. Rate had seen a strong rally from $1.2540 to $1.2626 pre Bernanke on expectations, the risk-on rally also fuelled by the China rate cut. Rate extended its recovery to $1.2575 into early Asia as markets adjusted positions on expectation that the China cut would boost Asian equities. However, Tokyo took a different view of the cut, the move prompting suggestions that the move was pre- empting weak Chinese data, due for release this weekend. Equities moved sharply lower, Aussie taking the lead in currencies on the risk-off move, taking EUR/USD lower with it. Macro were noted sellers from $1.2565, then through $1.2535, with any recovery attempt meeting a mix of macro and Asian sovereign supply. Rate touched a session low at $1.2514, with some traders also noting former Greek PM Papademos warning that a Greek exit would push Greece toward a ‘vortex of self-destruction’. Rate recovered to $1.2533 before settling between $1.2517/33 into early Europe.
EasyForexNews Research Team