Closed in NY at $1.2955 after rate had recovered off session lows at $1.2880 as risk gained a boost on the back of comments from US Pres. Obama and House Speaker Boehner which were seen showing a compromise was possible concerning the looming Fiscal Cliff, with Fed Hilsenrath comments in the WSJ suggested that the Fed could move to unsterilized outright purchases once Operation Twist ends. An optimistic Beige Book also helped. Rate extended recovery to $1.2962 into early Asia before momentum faded and allowed it to correct back to $1.2941. Rate retained an underlying firm tone, despite Moody’s comment that the recent Greek debt deal doesn’t resolve sustainability. Fresh buyers emerged to take rate back up to $1.2960 before it settled between $1.2950/60 through the Asian afternoon. Rate remains driven by risk with headline comment on Greece and the US Fiscal Cliff seen as the main drivers. Eurozone confidence data due at 1000GMT will provide morning focus. Offers seen placed into $1.2970 with stops above, a break exposes $1.3000. More stops $1.3005. Bids $1.2885/80, stops below.
EasyForexNews Research Team