The euro began the New York session at 1.3346 having traded 1.3334 to 1.3372 in Tokyo and London. Weak German and Italian data kept the pressure on the euro for the bulk of the European market.
German factory orders fell 3.2 % in June far below the 0.9 forecast and after dropping a revised 1.6% in May. But it was the negative Italian 2nd quarter GDP that helped push the euro through the prior low of 1.3349 to the bottom at 1.3333. Italy is now in its third recession of the past five years by the standard definition of two straight quarters of negative GDP. Growth in the first three months of the year was -0.1%.
Markets are also nervous about Russian intentions in Ukraine where its troops are massed on the eastern border and the Russian counter sanctions against the EMU and the European Union.
Tomorrow's ECB meeting holds little prospect for concrete action by the central bank on its twin concerns of deflation and economic growth though Mr. Draghi may well attempt to further talk down the united currency.
After the NY open the euro range was limited to 1.3346 to 1.3359, though the gradual tilt was higher. Just after noon the euro suddenly surged through the old top at 1.3372, paused and then climbed to 1.3387. A quick glance at other pairs proved like maneuvers with the dollar falling across the board. The likely culprit was a large execution on the yen futures at the CME, reported by MNI and zerohedge.com which quickly influenced dollar/yen and outward. The euro fell back to 1.3367 as dollar/yen recovered but then firmed into the close at 1.3382.
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