The more than 4% rally in US equities, 8% rise in oil on rising risk appetites has spilled over into EUR/USD this afternoon, helping push the pair through resistance in the 1.3490/00 area. Prices have retraced more than 61.8% of the recent drop from 1.3735 level. Quantitative ease from the ECB is a month away, so dealers seem comfortable buying the single currency. By the time they get around to finally acting, the stigma will probably be greatly diminished.
It’s nice to see the dollar fall for the “right” reasons, a fall in risk aversion rather than trumped up fears of the dollar losing its reserve status or a wave of inflation lurking just over the horizon. We should be so lucky…
EUR/USD trades at 1.3502 after reaching 1.3516.
