EUR/USD dipped to 1.3425 but has since bounced back with soft US consumer confidence data and renewed focus on the subprime mortgage market helping undermine the USD. Those two factors are likely working hand in hand as the relentless focus on mortgage woes has Joe Six-Pack feeling a bit less rosy.
Protection of 1.3450 barriers remains in play, helping keep EUR/USD south of 1.3440. Central bank sales were spotted near the highs earlier. The Fed's Mishkin says that the Fed should consider asset prices and exchange rates in its calculus, but goes on to say that they should not focus too much on exchange rates.
One factor helping prop the EUR overnight was a Bloomberg story saying both the US and EU were pleased with the present EUR/USD rate. The ECB is helped on the inflation front by the strong EUR while US exports get a lift from USD weakness. EUR/USD trades at 1.3432.
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