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Euro in New York--ECB Greek Surprise Dissipates

Posted by Joseph Trevisani on Feb 5, 2015 4:57:00 PM

The euro opened in New York at Euro-dollar opened at 1.1405 having rebounded sharply from the early Asia low of 1.1304 brought on by the ECB announcement that it was no longer accepting Greek debt as collateral. That notice in late New York trading on Wednesday had dropped the euro from 1.1447 to 1.1316 before the value date change at 5 pm.

The rally was aided by stronger German factory orders for December (4.2% vs 1.5%, Novemer -2.4%) and eur/chf demand and  rumors of SNB buying. The move higher accelerated at 1.1400 and stops there quickly pushed to 1.1420 , eliminating any weak shorts from below the figure.

Greece dominated the news as German Finance Minister Schaeuble and his Greek counterpart Varoufakis appeared in a joint press conference with little or not progress reported. This put renewed pressure on the euro whcih fell to 1.1392 but climbed back to 1.1445 on a wider than expected U.S. tradeficit and rallied on wider US Trade deficit and weaker nonfarm productivity. 

Further remarks fron the ECB's Klaas Knot that he doesn't see proof that the Greek program required by the bailout agreements is on track and Greek Prime Minister Tsipras repeating  that his election will put an end to the Troika produced a dip to 1.1418. The market seems to be unconvinced that either side will let the conflict over Greece's debt force her exit from the euro. 

WorldWideMarkets

Chart: Bloomberg

eur min frb 5

 

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