The euro managed to rebound from a 2-month low of 1.3508 made during the Asian session earlier, as a rise in money-market rates helped the currency to climb out of that particular hole. The overnight money-market interest rate known as EONIA jumped to 0.343%, which was much higher than the ECB’s main refinancing operations rate at 0.25%. EONIA ended the previous week at 0.30%.
This however did cause some speculation that the ECB would be pushed to intervene in the market in order to provide liquidity. The ECB chief had recently said that the Bank could take action if money market conditions deteriorated. Such ECB action would be bearish for the euro. European banks have paid back about half of the 1 trillion euros they borrowed from the ECB at the height of the crisis, leading to tighter liquidity conditions for the Eurozone.
The euro managed to gain 0.13% to trade at 1.3539 against the dollar. It was unable to make much headway versus the yen, as euro / yen remained pinned below 141, little changed during the session at 140.97.
Traders will focus on Thursday’s Markit PMI figures with respect to Eurozone business sentiment. Consumer sentiment will also be announced that day.
The US dollar, in the absence of any major news as the US is on holiday today, succumbed to light profit-taking. Apart from the light losses against the euro, it was down 0.12% against the Japanese yen, finishing marginally below the 104 yen mark at 103.99.
The pound was little changed against the dollar, trading at 1.6429, while the euro climbed 0.10% against sterling to trade at 0.8249. Wednesday’s UK employment report and Bank of England minutes will be key for sterling.
The Australian dollar continued its rebound off the fresh 3 ½ year low it made during the Asian session (0.8756), as it rose 0.15% against its US counterpart to trade at 0.8808. The slightly better-than-expected Chinese GDP growth figures for 2013 helped the aussie to stabilize following heavy selling.
Traders expected the US session to be characterized by thin liquidity conditions because of the US holiday.
The euro managed to rebound from a 2-month low of 1.3508 made during the Asian session earlier, as a rise in money-market rates helped the currency to climb out of that particular hole. The overnight money-market interest rate known as EONIA jumped to 0.343%, which was much higher than the ECB’s main refinancing operations rate at 0.25%. EONIA ended the previous week at 0.30%.
This however did cause some speculation that the ECB would be pushed to intervene in the market in order to provide liquidity. The ECB chief had recently said that the Bank could take action if money market conditions deteriorated. Such ECB action would be bearish for the euro. European banks have paid back about half of the 1 trillion euros they borrowed from the ECB at the height of the crisis, leading to tighter liquidity conditions for the Eurozone.
The euro managed to gain 0.13% to trade at 1.3539 against the dollar. It was unable to make much headway versus the yen, as euro / yen remained pinned below 141, little changed during the session at 140.97.
Traders will focus on Thursday’s Markit PMI figures with respect to Eurozone business sentiment. Consumer sentiment will also be announced that day.
The US dollar, in the absence of any major news as the US is on holiday today, succumbed to light profit-taking. Apart from the light losses against the euro, it was down 0.12% against the Japanese yen, finishing marginally below the 104 yen mark at 103.99.
The pound was little changed against the dollar, trading at 1.6429, while the euro climbed 0.10% against sterling to trade at 0.8249. Wednesday’s UK employment report and Bank of England minutes will be key for sterling.
The Australian dollar continued its rebound off the fresh 3 ½ year low it made during the Asian session (0.8756), as it rose 0.15% against its US counterpart to trade at 0.8808. The slightly better-than-expected Chinese GDP growth figures for 2013 helped the aussie to stabilize following heavy selling.
Traders expected the US session to be characterized by thin liquidity conditions because of the US holiday.
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