FOREX-Euro rallies from 4-year low vs U.S. dollar
Currencies
By Gertrude Chavez-Dreyfuss
NEW YORK, May 19 (Reuters) – The euro rose from a four-year low against the dollar on Wednesday…
A European Central Bank spokesman, however, declined to comment on market rumors of fresh central bank action.
“We’ve got this rally in the euro and I think it’s the market’s understanding and fear that the G7 is concerned about the speed of the euro’s decline,” said Dean Popplewell, chief currency strategist, at OANDA in Toronto.
“The market is worried or is anticipating some sort of verbal intervention or even a multilateral currency intervention to boost the euro.”
… the euro was last up 1.7 percent against the dollar at $1.2391 EUR=EBS after going as high as $1.2399, according to electronic trading platform EBS.
The euro’s move to a four-year low at $1.2143 stopped ahead of key technical support at $1.2135, the 50 percent retracement of the entire bull move in the euro from all-time lows near $0.82 to the record highs just above $1.60.
Traders said option barriers at $1.22 were taken out and more were lined up at $1.21, $1.20 and right down to $1.15.
— the euro is still down more than 13 percent against the dollar so far this year, hammered by concerns Europe’s debt problems and austerity measures to combat them could hamper euro zone economic recovery.
EXTREME BEARISH EURO SENTIMENT
In the options market, euro/dollar one-month risk reversals EUR1MRR=GFI, a measure of currency sentiment, showed an extreme bias for puts, rising to -2.925 vols on Wednesday from -2.6125 on Tuesday, according to GFI data. ….
In general, put options suggest investors are betting on a decline in the currency.
Euro/dollar one-month volatility EUR1MO=, a gauge of the option market’s expectations on a currency’s trading range, surged to 16.55 from 15.25 percent on Tuesday.
The euro rose 1.8 percent against the Swiss franc at 1.4285 francs EURCHF= after going as high as 1.4307. The euro was on track for its best gain against the Swiss currency since March 2009 as speculation swirled the Swiss National Bank intervened to counteract the franc’s strength in recent sessions.
The euro was last up more than 1.0 percent against the yen at 113.40 yen EURJPY=.
…
The full story: Reuters By Gertrude Chavez-Dreyfuss
NEW YORK, May 19 (Reuters) -c
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