FX: The Dollar Was Hampered By The Decline In Yield Support
The Euro found support below 1.25 against the dollar in early Europe on Tuesday and then strengthened steadily during the day. Equity markets looked to rally after recent losses and this helped improve risk appetite which also helped underpin the Euro. There was some stabilisation in sentiment surrounding the Euro-zone bond markets which also helped bolster Euro sentiment with some optimism that budget deficits could be brought under control without triggering a renewed recession. Sentiment could still reverse rapidly given the underlying structural vulnerability and the Euro has still been dependant on a reduction in short positions. Full Story
