On Friday, a decent US payrolls report was not able to give EUR/USD trading a clear bias. USD gains were temporary. At the same time, the downside of the euro was still well protected as sentiment on risk remained positive and as markets questioned the probability of negative ECB deposit rate. Intraday, EUR/USD hovered in the 1.3075 area at the start of trading in Europe, but soon regained the 1.31 handle. The rebound was supported by comments from ECB Nowotny. He suggested that markets over-interpreted the possibility of a negative deposit rate. He said that it was one option but not relevant in the near future. This retracement on the soft tone from the ECB press conference supported the euro throughout the morning session.
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KBC