EUR/US is pulling back after its rally stalled just shy of 1.4350. Given that China bought your amount of EUR/USD just below 1.4200 yesterday, we’d not be surprised to hear of sales by those same folks on strength today. That’s the way they’ve played for months. No reason to change today. EUR/USD trades at 1.4325.
Don’t expect too much from the ECB; dealers will look to see if the ECB is willing to add a spread to its refi rate (1%) for its upcoming 1-year term operation. If they do, it may signify that they see markets normalizing to the point where they do not have to shovel euros out the door at very low rates. That might be a euro positive.
