Yesterday’s squeeze in EUR/USD saw highs of 1.3738/40 while today’s rally on the coordinated rate cuts reached 1.3728. There is still a bit of a gap to be filled up to about the 1.3770 level from the Asian open on Monday. Expect offers to be thick in the 1.3775/1.3800 region.
GBP is particularly weak this morning despite the UK government move to recapitalize the banking system and the BOE rate cuts. Along with the 50 bp cut, too little/too late will be the likely response, I fear.
