Closed in NY at $1.2120 after rate had recovered off session lows of $1.2067 to $1.2145 on a mix of reported middle eastern demand and short covering. Rate had dropped back from $1.2138 to $1.2108 in late NY into Asia as markets reacted to Moody’s cutting its outlook for Germany, Netherlands and Luxembourg to negative, whilst affirming Finland’s AAA status and leaving outlook stable. The pullback was seen cushioned by the unwinding of EUR/AUD shorts, with Australian bank buys lifting the rate through $1.2125 and on to $1.2135 before momentum faded. Another dip below $1.2120 was again greeted by EUR/AUD unwind linked demand, with the recovery this time given an added boost by the release of better than forecast HSBC China PMI data. EUR/USD touched a session high of $1.2138 before again meeting decent supply ahead of $1.2140. Rate eased to $1.2110 before settling around $1.2130 into Europe. Some Asian traders noted the high level of the PBOC yuan fix today, suggesting it may weigh on the euro during the day. Offers into $1.2140, stronger $1.2155-80. Support $1.2110/00.
EasyForexNews Research Team