The euro opened in New York (8:00 am) at 1.3798, two points above the Asian and European low. The European range was just 20 points (1.3796-1.3816) with a powerful early season storm given the credit for closing much of the City of London.
Early U.S. market action drove the euro through the low, activating stops down to 1.3783. From there it rallied quickly to 1.3796--all in the first 40 minutes of trading. Choppy pricing took over for a few minutes after the rally but selling returned and the euro broke to 1.3774 aided by better than forecast September U.S. industrial production (0.6% vs. 0.4%) and capacity utilization (79.3% vs. 79.0). The October 25th low was 1.3775.
If the sellers had been exhausted by the move from 1.3800 to 1.3775, so too had the buyers and the euro gyrated between those limits for the next four hours, with the London close mid-way producing no new impetus.
Suddenly at 2:21 pm the euro vaulted from 1.3792 to 1.3810 in eight minutes. Upward movement stopped as quickly as it had started. The pair then dawdled above 1.3805 for about an hour and then reversed as precipitously back to 1.3783 and closed at 1.3786.
There was little correlation for the move from other markets and the simplest reason is probably the best, a large buy order hitting an afternoon market. But there was no confirmation of such from traders. The Dow reached its high at 2:43 pm before the euro run began, though the beginning of the fall in euro at 3:33 pm does roughly coincide with the Dow breaking back through Friday’s close at 15,570, 3:35 pm.
Federal Reserve rate and monetary policy decision is Wednesday at 2:00 pm.
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