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Euro Summary--New York

Posted by Joseph Trevisani on Jun 19, 2014 5:17:00 PM

The euro opened at 1.3618 in New York (8:00 am) near the top of its 1.3584-1.3644 Tokyo and London range.

The dollar has been on the defensive after yesterday's FOMC meeting which, though making all the expected policy choices, saw the Fed drop its forecast for 2014 GDP growth to 2.1% to 2.3% from 2.8% to 3.0%, a 24% reduction. 

The initial volatility after the FOMC statement and Chair Yellen's news conference subsided quickly. The euro settled about 20 points higher and kept to a tight range  just under 1.3600 until the London open.  European traders took it through 1.3600 pausing at 1.3620 and then retreating from 1.3628 to 1.3613 before reaching 1.3644, the day's high early in the London session assisted by the sterling break of its 2009 high at 1.7044. 

American statistics gathered little reaction, initial jobless claims at 8:30 am (312,000, expected 313,000) and the June Philidelphia Fed Index at 10:00 am (17.8, expected 14.0) 

US Treasury yields moved higher in New York, the 10-year closed up 4 basis points at 2.62% and that helped to take the edge off the euro, along with profit taking in the sterling.

Comments from Ignazio Visco ECB board member and governor of the Bank of Italy that European inflation is persistently low, brought the euro to 1.3616 just before the London close. A brief rally returned to 1.3625 but  sellers  capitalized dropped the pair to 1.3603 and for the balance of the session it moved fitfully between 1.3602  and 1.3610 closing at 1.3607. The 21 day moving average is at 1.3600. 

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Chart: Bloomberg




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