Overview
Today’s session was yet again another volatile one in the FX arena with EUR/USD initially printing its highest reading in 2 weeks with higher yields helping to support EUR, furthermore EUR/USD also took out stops through 1.1300 where there was a touted option barrier with the move said to be exacerbated by hedge fund buying. Moves in the EUR then subsequently boosted some of its other major counterparts with EUR/JPY and EUR/GBP at 5-month and 5-week highs respectively.
However, European assets then halted and reversed these moves as the German 10-year yield failed to breach the 1.0% level to the upside and subsequently retreated back toward 0.9%, dragging EUR lower in the process and helping the US Dollar Index to erase some of its earlier losses. Furthermore, as the USD gained traction against its major counterparts, it exerted further pressure on commodity-related currencies with CAD shrugging off better than expected Ivey data and compounding the losses seen for AUD overnight in the wake of weak trade balance and retail sales data.