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Euro in New York: A Breather for Profits

Posted by Joseph Trevisani on Aug 21, 2014 3:49:00 PM

The euro opened in New York at 1.3263 after bouncing from the new 2014 low of 1.3242. Profit-taking  was triggered by the better than expected German and French PMIs though tempered somewhat by the lower than forecast  eurozone PMIs 30 minutes later. The recovery ended at 1.3278 and by the U.S. open  the euro was back to its pre-release levels near 1.3256.

Initial trading in New York took the euro to 1.3270 despite the sub-300,000 weekly jobless claims at 8:30 am. Later statistics at 9:45 am (Markit manufactruring PMI 58.0 vs 55.7) and 10:00 am (Philadelphia Fed Business Outlook 28.0 vs 19.7), existing home sales (5.1 million vs 5.02 million), leading index (0.9% vs 0.6%) and euro zone consumer confidence (-10.0 vs -9.1) were pro-dollar in complexion but the euro moved steadily higher.  This was attributed to a combination of short covering ahead of the Jackson Hole Symposium and support at the 38.2 percent Fibonacci  (1.3248) of the July 2012 May 2014 trend broken on July 22.

The yield on the 10-year Treasury slid two basis points to 2.41 percent in spite of the  positive U.S. statistics, adding its weight to the dollar. The euro rallied to a daily high of 1.3288 about an hour before the London close but offers at 1.3290 aborted the climb. Afternoon action was limited to 12 points 1.3274-86.

The euro closed at 1.3280. 



Chart: Bloomberg



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