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EUR/USD dropped from $1.1414 through....>

EURO-DOLLAR
MNI (London)
EURO-DOLLAR: EUR/USD dropped from $1.1414 through the 1600GMT fix to a low of
$1.1343 before it managed to correct to $1.1358 ahead of the close. Wednesday's
sharp recovery in US equity markets allowed EUR/USD to extend its recovery in
Asia (Asian stocks followed Wall Street's lead) as rate edged on to $1.1390.
Rate eased to $1.1375 ahead of the European open, only to bounce back toward the
$1.1390 level. Resistance seen into $1.1400, the level also holding the stand
out option expiry for today's NY cut, E1.88bn. A break to then expose
Wednesday's NY high of $1.1414 ahead of $1.1420/25. Support $1.1375, $1.1358
ahead of $1.1343. Month-end models, published ahead of Christmas and Wednesday's
equity recovery, have suggested strong USD demand to be seen at the Jan31 fixes.
Wednesday's recovery may have slightly dulled this outlook though USD demand
still expected to be seen, along with SOMA interest($18.2bn). Equity market
performance to continue as the barometer for risk, though markets currently
waiting to see if Wednesday's rally can be sustained/built on.
- ECB Economic Bulletin 0900GMT. US Weekly Jobless Claims 1330GMT, New Home
Sales(1500GMT)  
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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