Friday June 17, 2005 - 10:20:29 GMT
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Euro Bounce Continues
After a very volatile New York session during which the EUR/USD had to endure an early morning “drive by” from a hedge fund that left dealers scrambling for liquidity and dropped the pair down by 100 points in the course of an hour, euro found a toehold above the 1.2100 level in tonight’s European trading session as the market awaits news from the EU budget meeting and US Current Account figures due 12:30 GMT. In overnight economic news Euro-Zone Industrial Production numbers increased by larger than expected 0.5% suggesting that the lower euro may be finally having a positive impact on the region’s beleaguers manufacturing sector.
In Asia Pacific tonight traders shrugged off the mildly bullish LEI data which showed an improvement to 31.8% from prior period’s 25% but still remained well below the 50% expansionary value. More importantly, forecast of the important Tankan survey suggested that the June quarter will remain essentially unchanged from March but outlook for September is expected to improve.
As the week comes to a close the euro may well end up close to where it started, perhaps registering the first small gain in 9 weeks. While the dollar rally has been stalled fro the time being, the euro will need a dose of positive political news such as constructive resolution of the EU budget meeting in order to spark a charge of its own.
FX Spot Overnight
- EUR holds the 2100 figure and targets 2150
- JPY at 109.00 unfazed by better LEI data
- GBP at 8250 firming its turn upward
- CHF cracks the 2700 figure to the downside
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