The single currency strengthened and broke the 1.27 limits after data from American labour market disappointed on Friday. It confirmed that American currency was sensitive to unpleasant news and that the euro was ready to use it. Long expected G7 meeting did not bring any surprise. Finance ministers and central bank governors warned from the high volatility of exchange rates but did not show any action how to prevent it. We expect that tendency to euro strengthening goes on, even when the dollar might be supported by BoJ interventions. Today we expect a range of 1.2690 and 1.2790; the USD/EUR rate was at about 1.2742 this morning.
CSOB - Investment Research