After a frantic evening in Asia, the US session was much less dramatic. A tiny upside range extension in EUR/US to 1.3415 was seen this morning with the rest of the session devoted to backing and filling on the 1.33-handle. All in all it was a very strong week for the euro.

Why? There is not much of a fundamental case to be made as the European economy is in the midst of a deep recession just like the US but the central bank and the governments have been less aggressive in their policy responses than their Anglo-Saxon cousins which some see as a virtue.

Part of the move is technical in nature, part is attributable to a slowdown in deleveraging and part is fear of the unknown as the US dips a toe into the quantitative easing pool. Japan is the only one to have swum in these waters before, with mixed results.

The Japanese Tankan survey is due out on Monday while Goldman releases earnings on Tuesday. The Fed meets Tuesday and Wednesday with a further cut priced in, bringing official rates in line with market rates, i.e. zero.

The markets head out at 1.3375, 91.10, 121.85 and 1.4965.

Have a great weekend!