The euro opened New York trading at 1.3515 (8:00 am), at the low of its Asian and European range. U.S. Treasury yields rose after comments from St. Louis Fed President James Bullard that the central bank could still taper quantitative easing at the October meeting and that the September decision was close.
The rate dropped to 1.3508 a few minutes after the open but buyers ahead of the figure pushed it back to 1.3538 as U.S. rates moved lower, then settled into a 1.3520-30 range. European consumer confidence for September, at 10:00 am was weaker than predicted but an improvement on August.
The downside broke on selling interest into the London fix drove the rate to 1.3498, but the pressure quickly dissipated and the euro recovered to 1.3525.
Comments from Kansas Fed President and a known hawk Esther George, who was the sole dissenting vote at the Wednesday FOMC meeting, that tapering should have begun were ignored. Treasury yields then traded to their lowest levels of the day with the dollar modestly weaker bringing the euro 1.3537.
A much weaker Dow, closing on the low, down 185.46 points at 4:00 pm had no impact in currencies.
The German election on Sunday will be the focus as markets re-open on Sunday evening, Monday in Sydney and Auckland. Angela Merkel seems certain to be re-elected as Chancellor, but whether she will be able to maintain her preferred center-right coalition is too close to call. The euro may be sold if the new anti- EU Alternative for Germany party wins more than the five percent of the vote needed to gain parliamentary seats.
Chief Market Strategist