Euro rates today: EUR spikes higher, reversing yesterday's 'interesting' plunge against the US dollar

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Category: Exchange Rates

Published on Thursday, 16 August 2012 12:56

Written by Sam Coventry

Despite today's spike higher the euro remains under pressure.

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The euro (Currency:EUR) has spiked higher against the US currency on afternoon trade in London. The move has gone some way in reversing yesterday's sudden fall in EUR-USD.

The euro dollar exchange rate is 0.13 pct higher on a day-by-day basis at 13:40 in London.

The euro pound exchange rate is 0.11 pct lower at 0.7827.

Analysts have noted that yesterday’s trading FX pattern was interesting with a sudden drop in EUR-USD at mid-morning in London.


Scotiabank analyst Camilla Sutton says it was widely rumoured to have been caused by the SNB beginning to diversify EUR reserves; "followed by a North American session with awkward strength in SEK, CAD, AUD and GBP, all potential homes for SNB reserves."

This afternoon's dramatic climb in the euro could have a similar, albeit opposite, basis to yesterday's moves ie. central bank flows. There is certainly a dearth of market moving news this afternoon.

Nevertheless, wiping away these dramatic spikes it is worth noting that the euro remains under pressure.

"The EUR continued its trek lower for the week through the majority of the overnight session, but has found a footing in recent hours after marking a low at 1.2260. Without a catalyst, the 1.2250/60 area should provide decent support in the short term, and given the underlying bias remains lower still, EURUSD looks to be a range trade for now," notes Shaun Osborne at TD Securities.