The euro opened in New York at 1.3668 not far from the European high of 1.3687 of a few hours earlier. About 20 minutes before that high the euro had suddenly raced higher covering the 40 odd points between 1.3627 and 1.3669 in five minutes, reversing yesterday's losses. Traders were not exactly sure what had led to the surge but most likely a short squeeze developed quickly as the currency crossed above 1.3637 the starting point for yesterday's collapse to 1.3575 and the subsequent low at 1.3561.
As it were markets were wary of the US retail sales figures at 8:30 am with the severe winter weather in much of the country raising the potential for substantial miss on the flat January forecast. A miss was in fact delivered by the Commerce Department. Sales came in at -0.4 percent and December was dropped to 0.3 percent from 0.7 percent at revision. Jobless claims were also 8,000 more than predicted at 339,000.
The euro immediately spiked to 1.3691, the day's high, but there was no challenge of the orders at 1.3700. There was a quick retreat to 1.3662 and then a back and forth between there and 1.3680 occupied about an hour with the euro/yen keeping the buying firm.
Trading interest subsided as the morning turned into afternoon and a major snowstorm enveloped New York. A very slow climb from 1.3662 to 1.3683 took the balance of the session closing at 1.3677. There was no reaction to the news that Italian Prime Minister Letta will resign tomorrow.
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Chart: WWM Alpha Trader