EUR/USD closed Monday’s session around $1.2665, having consolidated Friday’s drop to $1.2624 in generally subdued US holiday trade within a range of $1.2626/82. Rate initially dipped into Asian dealing, marking lows at $1.2648 as early traders reacted to the S&P downgrading of the EFSF from AAA to AA+, though move was expected after Friday’s action. Early move quickly reversed as rumours that Chinese GDP would come in above expectations swirled. Confirmation boosted risk, the move through $1.2690 triggering stops taking rate to overnight highs of $1.2737. Confirmation by S&P of EIB’s AAA rating also aided EUR recovery. Rate retained its firm tone into early Europe, eventually clearing through reported offers between $1.2750/70 before release of a much stronger than expected ZEW release provided the momentum to take rate on to $1.2800. Very strong offers at the figure topped out the move, with long covering allowing rate to ease back toward $1.2770. US return awaited and reaction to the recovery off Friday lows at $1.2624.
EasyForexNews Research Team