We’ve had some dollar weakness today but it was mostly a short-squeeze in EUR/USD and EUR crosses like EUR/JPY and EUR/GBP than any change in the investment landscape.
Portugal got the rubber stamp of approval on its debt package, as expected, while Greece grapples with having to liquidate a vast chunk of its state holdings before the EU will pony up any more cash. None of that is particularly positive for the euro…
Commodities resumed their losses today, particularly energy, as fears of Mississippi River floods cripple refining capacity were alleviated over the weekend. Equities remain modestly underwater and safe-haven currencies remain well underpinned.
CHF and JPY are having strong sessions (JPY, primarily against the dollar), as traders continue to try and find non-dollar outlets for funds they want to steer away from the euro zone, given the never-ending debt crisis.
EUR/CHF is withing a centime and a half of its all-time lows amidst talk of massive stop-loss selling if 1.2400 (December 30 and March 17 all-time lows) …We all know how the market loves a challenge, so buying dips ahead of 1.2400 looks ill-advised to me. Buying after a wash-out to the downside looks like a much better bet if so inclined…
What message does today’s price action send? To me, it says today was a short-covering rally for the euro but the near-term trend remains to the downside. 1.4000 is one of those big round numbers that the market may want to take a crack at while it still has some downward momentum..
Would you like some maple syrup to go along with that afternoon waffle?
