Forex Flash: Dollar mixed as EUR/USD makes multi month high – Wells Fargo

FXstreet.com (Barcelona) - Nick Bennenbroek, Head of Currency Strategy at Wells Fargo notes that the U.S. dollar is slightly mixed, but lower overall as the Euro reached a new multi-month high against the Greenback, while the yen reached its weakest level since mid-2010.

Looking to Europe he sees that the regional debt markets are relatively calm while the single currency was perhaps supported by a rise in Eurozone economic sentiment. The FX market impact from the unexpected decline in U.S. Q4 GDP has so far been limited, with the negative U.S. dollar impact from continued Fed easing expectations offset to some extent by a more cautious market mood, which is U.S. dollar positive.

Elsewhere he sees that the other major European currencies are higher, while the yen is lower. Elsewhere, FX markets are more mixed. The Australian, New Zealand and Canadian dollars are lower, while emerging Asian and Latin American currencies are mixed, but emerging European currencies are generally higher. In addition to the U.S. GDP report, he feels that the proximity of the Federal Reserve's monetary policy announcement may also be keeping some market participants on the sidelines. Bennenbroek finishes by writing "If, as expected, the Fed offers a firm signal of continued easing, today's slight jitters could dissipate. We suspect recent FX trends could continue in the near-term, with further gains in the Euro and commodity currencies possible, and mild bias towards yen weakness."