August 18, 2011
It was a topsy-turvy day for the euro, which was simply all over the place in yesterday's trading. EUR/USD spiked to as low as 1.4325 at the start of the London session, before recovering on improved risk appetite. The pair then soared to as high 1.4518, before giving back some of its gains to close at 1.4435, marking just a 26 pip gain on the day.
The main reason why the euro recovered midday was due to an improvement in sentiment, as well as traders warming up to the ideas brought about during the meeting between Sarkozy and Merkel the day before. The question is, how long can this sentiment keep up?
In other news, euro zone headline CPI figures came in as expected at 2.5%. Interestingly, core CPI came in much lower than anticipated, printing at 1.2%. This was a major drop from last month’s 1.6% figure, and the expected 1.7%. This indicates that without including food and energy, prices are actually dropping. This would further support the notion that the ECB should hold out on any rate hikes in the meantime.
No biggies on the docket today, so it is possible that we’ll see more consolidation in today’s trading. Good luck trading homies!
Last edited by PipDiddy; 08-17-2011 at 10:02 PM.
"The only cable I watch is the pound baby."