Gotta bunch of 1.25s you want to protect? Wait for the market to square up for the weekend on a thin Friday afternoon and launch a sneak attack. EUR/USD ramped up to 1.2835 as fears of bank nationalizations over the weekend and a sudden influx of buy orders from an Asian central bank hit the market. EUR/USD has eased back to 1.2775 and will likely be razor thin this afternoon with traders feeling burned.
Just crossing the wires are comments from ECB managing board member Papademos. He says it is wise for central bank policy to be counter-cyclical; leaning against the wind, is how he describes it. (I can think of some cruder metaphors regarding the wind…) Central banks must prepare an eventual exit strategy from crisis measures. Bernanke stressed that earlier this week as well.
