Central banks that were forced to shed reserves to protect their local currencies during the worst of the financial crisis last fall and winter have been taking advantage of the steadier market environment to replenish those depleted reserves.
Russia is said to have bought about $4.5 bln USD/RUB today and if they stick to their stated 55/45 USD/EUR basket, they would have to buy something like EUR 1.4 bln in the market. Dealers tell us they have completed about half their interest, so they could be buyers on dips for the balance of the session.
EUR/USD trades now in the 1.3565 neighborhood after the reflation trade took a blow from poor US housing starts.
