The pair closed in NY Wednesday at $1.2345 following a volatile reaction to the FOMC announcement which initially saw rate jump to $1.2474, as the ‘considerable time’ component was only slightly tempered by the mention of patience before it dropped to extended lows of $1.2321 as market focused on Fed Yellen’s Q&A where a suggestion a move could come after the first couple of meetings in 2015 was pounced upon. Most see this supporting a June hike based on similar language adjustments in 2004. Euro-dollar consolidated around $1.2330 in early Asia before rate dipped to retest Wednesday’s FOMC react low of $1.2321. Rate gradually edged back up to $1.2353 before it settled around $1.2345 through to the European open. Reported ECB Coeure comments ahead of FOMC Wednesday, hinting at large asset purchases next year, had weighed on the euro pre announcement and will be seen adding to the negative euro aspect, along with last night’s failure by the Greek parliament to vote in a new president. Germany Ifo at 0900GMT provides morning interest, with a possible uptick in sentiment based on lower oil. Euro-dollar bids into $1.2320, stronger toward $1.2300 with level holding very large option expiry interest for Friday’s NY cut.
