Opened early Europe at $1.2670, EUR/USD closed in NY at $1.2704 having experienced a volatile reaction to the FOMC extending Operation Twist into year end, initially dropping to session lows of $1.2638 before bouncing sharply back to highs of $1.2744 as details of the release were analysed. Rate then eased to $1.2650 before settling back above $1.2700 into the close as market reacted to headlines suggesting that the EU is poised for a Spain and Italy bailout to the tune of $943bln. Rate touched a high into early Asia of $1.2709 before turning lower, the move down driven by Asian equity markets, with the added weight from a weaker than forecast China PMI taking the it to session lows of $1.2660. Rate settled between $1.2665/75 ahead of Europe. Further selling emerged into Europe, taking the rate to $1.2663 into release of French flash PMI data. The better than expected showing took rate to $1.2685 before it slipped back, dropping to $1.2643 on release of weak German PMI. Semi official buys into the dip aided recovery, edging to $1.2687 late morning.
EasyForexNews Research Team