Closed in NY at $1.2685 after rate was pressured to late lows of $1.2658 as market reacted to ex-Greek PM Papademos that Greek EMU exit plans were being considered. Rate held above $1.2680 into early Asian trading before dropping to $1.2648 on reaction to reported comments from CIC Chairman Jin Liqun that Eurozone leaders should stop wasting time (The Times). Dip met UK clearer demand which cushioned and allowed for a recovery to $1.2655. Dollar-yuan fixed higher prompted another round of general dollar demand which dropped EUR/USD to session lows of $1.26432. Good two way business was recorded around this area, though reported stops below remained intact. Rate then recovered, aided by Papademos denials in a CNBC interview of earlier reported comments, adding that Greece leaving euro unlikely to materialise. Rate edged to $1.26retest early session highs at $1.2685, opening Europe around $1.2674. Bids remain in place to $1.2643 with stops below, a break to open a deeper move toward the 2012 lows at $1.2624 (Jan13) though option interest at $1.2625 expected to be protected.
EasyForexNews Research Team