Closed in NY Friday at $1.2927 after rate had recovered off post US jobs data lows of $1.2876 to $1.2951 on source reports on the break down of voting on the ECB board. Rate gapped down to $1.2905 into the Asian open as it was marked down on weekend reports that Italian PM Monti would resign once his Budget had been passed. The rate pressed down to $1.2881 before meeting demand, linked to euro-yen buying, that cushioned the early move and allowed rate to recover to $1.2916 (closing the chart gap). Rate drifted off to $1.2890, recovering back to $1.2905/10 into Europe. Political developments will hold Europe’s focus this morning, but events during the week will eventually take prominence. US FOMC Wednesday the highlight of the week with expectations the Fed will replace Operation Twist with outright Treasury purchases ($45bln per month). Market will also watch for clues for economic conditions where the Fed may begin to hike rates. US retail sales, CPI Thu/Fri respectively, flash Eurozone PMI’s Friday provide data interest; ECOFIN and EU Council meetings also of interest.
EasyForexNews Research Team