EUR/USD has gotten a big boost from the more benign US jobless claims data and the rising trade deficit which suggests consumption may be improving (or inventories rebuilt). EUR/USD rallied close to yesterday’s to at 1.4600/05 before stalling.
Traders noted very good flows in the 1.4580s earlier in the day with the Chinese selling as well as the Banque de France. The BDF used to be a regular player in the forex markets but we have not heard their presence in the markets much in recent years, so their emergence on the offer could be a subtle signal to the market that it has gone too far, too fast.
Offers are seen in the 1.4620/25 area now on order books, traders report.
By the same token, the BIS was a rumored buyer in the 1.4580s, so if the BIS is buying for the IMF, it looks like we could be in for a family feud…
