The EUR/US spike came shortly after the options expiry at 15:00 GMT, so we’ll chalk the move up to some repositioning by the options jockeys. Also contributing could have been the 1.1% m/m drop wholesales inventories in the US may have played a role. Inventories are a component of GDP so when they drop it drags further on the growth figures. In reality, lower inventories are a good thing as they imply a smaller overhang on goods and less discounting down the road. When low inventories need to be replenished, it will add to GDP. Someday. Critical comments on the TARP are weighing on the greenback as well.
Offers are seen scattered up to 1.3050 with some stops mixed in above 1.3045, dealers report. 1.3085 is important resistance above the market.
EUR/JPY is closing in on th 121.00 resistance level that capped the market on Monday.
