EUR/USD sits at 1.3350, little changed on the European morning so far. It seems some people have latched onto comments made by ECB’s Bini Smaghi yesterday, feeling they raise the spectre of possible ECB intervention to weaken the euro.
The official opined that “Exchange rate markets are prone to episodes of overshooting and undershooting. Public intervention, in the form of public statements or even outright intervention in fx markets, may thus be warranted.”
Bini Smaghi also added “inadequate macroeconomic or structural policies in a neighbouring country (for that read Eastern Europe) may provoke substantial exchange rate movements that have a detrimental impact on the euro area. Again public interventions may be warranted.”
Personally feel Bini Smaghi was talking purely hypothetically and I’d be very surprised to see the ECB intervene anytime soon.
Technical supports for EUR/USD come at 1.3320/25 and then 1.3285/90, resistance at 1.3405/10.
