Closed in NY Thursday at $1.3247 after rate had managed to recover off pullback lows of $1.3215 having seen highs earlier in the session of $1.3295. Rate extended recovery to $1.3253 into early Asian dealing before turning lower on reaction to S&P downgrade of Cyprus. This move lower gained momentum as headlines flashed that the Fiscal Cliff Plan B vote had been pulled due to lack of support with risk aversion moving to the fore. Swiss name sales from $1.3240 took rate to an initial react low of $1.3220. Announcement that there would be no vote on Cliff plans until after Christmas added to the negative tone and took rate through $1.3200, with triggered stops providing the added weight to allow rate to retest recent lows at $1.3187 ($1.3186 traded). Recovery to $1.3210 met German name supply which pressed rate to session lows of $1.3180 before meeting prime broker demand. Rate settled back between $1.3190/1.3210 ahead of Europe, challenging the topside at writing. Thin conditions to provide volatility as markets move to headline reaction and order driven trade. Focus will remain on the Fiscal Cliff negotiations.
EasyForexNews Research Team