EUR/USD is having another go at the topside now that the market has gotten over the usual bearish diatribe in the British press. The pair is being carried higher by GBP/USD which regained1.5240 a few minutes ago in what has been a particularly volatile morning session so far. Asian central bank buying has been the main driver of GBP/USD catching the market short after players tried to sell it first off believing that a ratings downgrade is not far away.
In terms of centrak banks look no further than the Bank of Korea who has intervened aggressively this week in USD/KRW in order to keep the local unit weak. He reportedly bought USD1.5bln on Tuesday and it appears now he is trying to recycle those dollars into other currencies.
In terms of EUR/USD option expiry’s at 1.3200 (Pet says 500mln) maybe playing a role – hard to know – but Tajul says stops above 1.3270 and this level is now not far away.
