I take the morning off and I come back to this chaos? Last time I leave Gerry in charge of you lot…
EUR/USD, the new safe-haven, has pushed to fresh session highs in the low 1.3680s, supported by fresh hawkish rumblings from the ECB’s Bini-Smaghi. Also the news that Iranian warships will be allowed to move through the Suez Canal toward Syria has given markets a fresh charge. For some reason, the euro is a beneficiary…the linkage is not exactly clear to me, but it is what it is.
My two-cents are that the market assumes Mid-East tensions push up oil prices. High oil prices push up Mid-East reserves. Mid-East reserves are partially diversified into EUR. GBP, etc…
Offers are rumored in the 1.3700/10 area near-term.
