The Latvian debt crisis is undermining the euro again as traders fear a devaluation in Latvia could have a domino-effect across the eastern half of Europe, ultimately undermining the major banks in the West of Europe with major exposures.

EUR/USD dropped back to the 1.4120s, not far above yesterday’s 1.4110 lows. Very large stops are seen at the 1.4090/95 level but they are being protected by on-going Asian CB interest to buy EUR/USD on dips.

Less than 30 minutes until the ECB rate announcement. No move in official rates is expected though details of its EUR 60 bln QE progam are expected to be detailed.