Last night’s announcement that the ECB QE would total E60bn a month until end Sept 2016 drove the euro down to a low of $1.1315 low in volatile trading, its lowest since 2003. Euro-dollar recovered marginally into the US close and started this morning at $1.1366. Early short-covering took the pair a bit higher to $1.1373 before the bearish tone resumed as the US dollar also resumed its broader gains. Euro-dollar tracked euro-yen lower in early dealings with the pair hitting bottom at $1.1339 before it recovered. Further short-covering interest kept the euro supported off that low before it then witnessed another brief spike to $1.1374 after the HSBC China flash PMI. Euro-dollar backed away again although the market also began to speculate about the possibility the SNB might also step in to weaken the franc and buy euros up. Euro-dollar was last at $1.1364. Immediate demand noted at $1.1300 with the next level of support seen at $1.1241, the Sept 19, 2003 and then $1.1141, the Sept 17, 2003 low.
