Tue 9th Nov: ECB to the Dollar’s rescue

The dollar couldn’t have asked for a better time for the European Central Bank to comment on the rising euro. The dollar which was trading at all time lows recovered on the concern shown by the ECB on the recent spate of euro appreciation.
Comments from an otherwise reluctant ECB to intervene, only reiterate the fact that despite its anti- inflationary benefits a strengthening euro will have an adverse effect on the Eurozone.
The dollar came off lows in the late US trading session to the move towards the 1.29 levels. Oil prices drifting lower close to the $49 per barrel mark should also aid the dollar in its course of recovery.
Sterling touched 1.86 on retail sales figures, but was dragged lower amid dollar strengthening.
Traders will now shift focus to figures expected from the Eurozone, importantly the ZEW sentiment survey and will watch out for any further intervention from the ECB.
The yen climbed to a five month high against the dollar to 105.30, unaffected by the developments in the European markets. Having broken the resistance at 105.60, yen could move to the next level at 105.20 on the trade figures and GDP figure expected later in the week. The markets will line up for data expected, special emphasis will be placed on comments accompanying the FOMC rate hike decision and retail sales figures from the US.