Closed in NY at $1.2270 after recovering from a session low of $1.2175, the move up boosted by the release of weak US retail sales, to highs of $1.2290. The weak data has boosted FX market expectations of QE3 with attention focused on this afternoon’s testimony from Fed’s Bernanke (1400GMT). Rate continued to slip off those recovery highs into early Asian dealing, touching a low of $1.2265 before fresh buying emerged. Stops above the NY high of $1.2290 then became targeted, the break taking the rate on to $1.2314 before momentum faltered and it drifted back off to $1.2290. Another push higher saw rate make a brief probe back above the figure only to sink back to $1.2190 into Europe. Germany ZEW due for release at 0900GMT ahead of US inflation data at 1230GMT, though both seen overshadowed ahead of the Fed Bernanke testimony. European bill auctions today include the EFSF issue of E1.5bln (189-days) at 1000GMT, as well as Spain E2.5-3.5bln 12-mth and 18-mth to provide some focus. Offers seen from $1.2314 through to $1.2320. Demand remains at $1.2290, a break exposing $1.2265.
EasyForexNews Research Team