The market was reluctant to push the euro above $1.2150 and we've seen it slowly come down from there during European trading.
The more hawkish rhetoric we've had from the ECB and talk of the next move in interest rates being up is protecting the euro a little. The problem the market has is that it's tougher talk, but action is still some way away.
The rise in output prices ... will not ruffle the doves unduly when the Monetary Policy Committee meets next month to decide on interest rates.
The rise in output prices ... will not ruffle the doves unduly when the Monetary Policy Committee meets next month to decide on interest rates.
The rise in output prices ... will not ruffle the doves unduly when the MPC meets next month to decide on interest rates.
The rise in output prices ... will not ruffle the doves unduly when the MPC meets next month to decide on interest rates.
The sense over the last few days seems to be that the dollar is reasonably well supported. We have had reasonably good numbers out of U.S. for a considerable period and the dollar did not rally, so maybe people are having a bit of a rethink.
The yen also got a boost from the China story because the yen is a yuan proxy.
There are concerns that the revival in euro zone business confidence has been driven by the external sector, which could be undermined if the euro keeps on rising.
There is a big hangover from soft U.S. data we had yesterday which worked in the direction of dollar weakness.
There is a reluctance to push the euro/dollar higher because of riots in France and pressure from euro zone finance ministers not to raise rates.
There's a justifiable degree of cynicism about the new coalition. People are unsure about what it will deliver in terms of economic reforms.
We are expecting a reasonably soft number, which could undo some small dollar gains we have seen against European currencies.
We will probably see inflation holding around 2.4 percent and it is still benign. Things are generally improving in the euro zone and I don't think this story will be derailed by the PMI.
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