Closed in NY at $1.2155 after settling between $1.2145/60 following the rate’s short squeeze recovery through the day, extending its recent recovery off lows of $1.2042. Rate drifted to a session low into Asia of $1.2127 on Tokyo fix EUR/JPY sales, but demand quickly emerged to correct move back to $1.2145, with rate settling between $1.2130/45 ahead of the European open. Rate currently trades around $1.2139. ECB Nowotny comments Wednesday that he sees arguments for allowing the ESM a banking license continues to get discussed, with some suggesting that coming ahead of the ECB Aug 2 meeting could be seen providing for a similar scenario as that seen in December with discussions between the ECB and officials that heralded the announcement of 3-yr LTRO. The risk appetite tone remains in place, with euro remaining buoyed. Wednesday’s short squeeze seen affecting short term investors with longer term shorts remaining in place prompting talk that this correction could prove short lived as rate remains open to headline driven moves. Bids $1.2130/20, $1.2095/90. Offers $1.2155/60, $1.2170/80 .
EasyForexNews Research Team