The euro was seen bright against the dollar as investors who had bet on the currency’s fall bought it back on fears of central bank intervention. Andrew Wilkinson, senior analyst at Interactive Brokers Group in Greenwich, Connecticut said: "With the immense amount of short positions in the market and EU leaders rushing to put together a lasting remedy, the euro has certainly found its footing. There has also been some market rumors that central banks would intervene, which in my mind is an unlikely event. However, the very suggestion is enough to make investors pare positions."
David Kupersmith, head trader at Third Wave Global Investors, a global macro hedge fund in Greenwich, Connecticut said: "The aussie/yen is a good proxy for the risk trade and the yen has done well on the move away from risk in Europe. It has nothing to do with the economic situation in Australia or Japan though there are signs Australia is slowing down."
The euro rose 0.9 percent to $1.2575. The dollar rose 0.4 percent to 89.91 yen.
I think 1.26 is very possible now… if no major events happen.