The EUR/USD seems to have successfully bounced back from last night's carnage that followed more poor news for Europe, specifically in this case, less than desirable German IFO data. The bounce can be attributed in part to some short-covering, as well as Hurricane Gustav lurking on the horizon with a potential track that will take it into the oil rig speckled Gulf of Mexico, thus pushing Oil prices higher. As oil climbs, it sometimes greases the wheels for a move higher in the Euro as well. EUR/USD made a nice move higher from its humble 1.4632 starting point, to levels close to 1.4743, not an insignificant move by any means. As of this writing, the European currency was just above the 1.4700 level. The Dollar can face new challenges ahead in the wake of higher crude, and the possibility of any financial sector surprises.
USD/JPY was soft this session as well, 109.71 quickly turned into 108.90 as the pair melted with the Dollar weakness. EUR/JPY was relatively quiet in comparison, sticking in around a 40 point range between 160.78 and 160.35 all session.
The London session is thin in the economic data area, but strangely keep looking to the weather reports in NY, for the coming of Hurricane Gustav can possibly effect the dollar as much as the weather.
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