Wednesday, October 13, 2010

EUR: Euro again attacking the level of 1.40; Weber is a hawk

Euro again attacking the level of 1.40 against the dollar in relation to the protocol FOMC, which added weight of the opinion that the second wave of quantitative easing is likely to happen before the end of the year. At the same time, the head of the German Bundesbank Weber, again spoke out against the program of the ECB for the purchase of bonds (as he did at the outset) and remained hawkish on interest rates, assuming that there is only minimal risk of renewed recession. In addition, he said that intervention in the currency markets should not be unilateral. Markets took this information as a sign that the ECB is not going to take any unilateral intervention in the continuing strength euros. The sharp rise in Chinese reserves, which became known last night, also became a supporting factor, as, in general, these provisions are directed to the euro.

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