EUR/USD’s pop to fresh session highs at 1.2848 turned out to be very short-lived. Traders apparently took the shift to the ECB using a floating rather than fixed rates on its three-month liquidity operations as a sign the ECB was laying the ground work for a hike, at some stage. Trichet quickly poured cold water on that idea, saying the move had no message for monetary policy attached.
German banks were among the heavies sellers near the highs, traders report.
We dipped as low as 1.2810 to shakeout weak longs and trade now at 1.2825. 1.2775/1.2850 range-trade prevails for the near-term…
