The EUR/USD opened in Asia at 1.2980 after a combination of pre-ECB/Trichet press conference jitters, lower US yields, talk of central bank bids at the lows and a let up in EUR/JPY selling helped the EUR/USD track higher during the Lon/NY sessions. There was talk in early Asia of stops above 1.3000 and the EUR/USD ticked up to 1.2993 early on before sellers just ahead of1.3000 discouraged attempts higher and kept the stops safe.
The EUR/USD fell to 1.2973 on broad, USD/JPY-led USD strength before settling back between 1.2980/90for the balance of the session. The EUR/JPY pushed up from 155.85 to 156.15, as the heavy EUR/JPY unwinding seen in the past few days appears to have died down. Sentiment towards the EUR has improved a bit as the effects of the dovish ECB MNI report last Friday have started to wear off with many analysts expecting Trichet to signal a March rate hike at his press conference tomorrow.
The EUR/JPY selling seen over the past few days appears to have died down, as most are coming around to the view that the G7 meeting this weekend is unlikely to bea major bullish event for the JPY. German IP out later today.
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