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Forex pairs in this Article » EUR/USD
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ notes that there are no major events taking place in Europe today (BOE’s Dales speaking at 1230 GMT is about it) and the focus remains very much on the tightening liquidity in euro-zone money markets as we approach year-end.

Key Quotes

“EONIA has been at 0.14% for the last two days – the highest levels outside month-end spikes since July 2012. The 3-month EUR basis remains in positive territory indicating a premium on euro funding that hasn’t happened since the financial crisis started over five years ago.”

“This may or may not reflect AQR-related demand from banks but it certainly suggests continued solid support for the euro. A taper announcement next week will probably only result in a shallow and brief correction lower. EUR/USD risks remains skewed to the upside over the short-term and we suspect there would be good buying on any dip.”
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