The euro opened at 1.2870 in New York having rebounded from the early Asia low of 1.2835. That 14 month low had been a continuation of the volatility and euro selling that began with the FOMC announcement yesterday afternoon at 2:00 pm. Tokyo had managed a recovery to 1.2874 before the London open.
European trading was on a slow steady uptrend which peaked in a quick spike to 1.2905 a bit more than three hours after the open. The poor sign-up for the ECB's targeted long term refinancing operation (TLTRO) (€82 billion against hopes of €100-€300 billion and a cap of €400 billion) didn’t dent the moderate interest in the euro. Yet neither was the united currency unduly boosted by the strong rally in sterling prompted by polls showing the anti-independence vote prevailing in Thursday's Scottish referendum.
The first US move was lower, pressed by good weekly jobless claims (280,000 vs 305,000, prior week 316,000) and euro/gbp selling to 1.2857. Housing starts and building permits for August were less than anticipated (starts 956,000 vs 1.037, July 1.117, permits 998,000 vs 1.040, July 1.057) and the more substantial move went quickly higher turning just three minutes after the twin 8:30 am releases and rising to 1.2902 by 9:20 am.
Traders had reported several large option expirations at and around 1.2900 and these acted as a magnet with the euro stalling just below 1.2900. After the expirations had passed there was further profit taking on short euro positions coincident with sterling strength and euro/yen demand that saw a fast 11 point run to 1.2903, and a more measured climb to 1.2929 at the London 4:00 pm (NY) fix. With that demand satisfied the euro fell back to 1.2906 with another brief flurry to 1.2915 at the London close, noon NY time.
The US afternoon was limited to 1.2909 to 1.2930 with most of the trading between 1.2910 and 1.22920 closing at 1.2924.