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Forex Flash: ECB commitment to the euro is vastly underestimated - BBH

FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman notes that comments from ECB President Draghi reiterating that the commitment to the euro is "vastly under-estimated" has helped the euro claw back its earlier losses entirely, and a move above $1.2855, especially on a close basis, would be a very constructive technical development.

He notes that Draghi seemed to get frustrated at the press conference with hypothetical questions about a Cyprus exit, to which he commented that there is no Plan B. Further, Chandler notes that Draghi argued that Cyprus is neither a turning point nor a template which has been his view as well. He writes, “Each episode during the crisis has seen European officials innovate and build institutional capacity. It is not quite the same EU or ECB as it was in 2010 when the Greek revelations were first made.” Separately, he adds that Draghi noted that the Emergency lending Assistance does not have seniority and ELA is loans from a national central abnk. He writes, “Banks turn to the ELA facility when they do not have collateral acceptable to the ECB. This seems to throw the ELA out of the official sector and toward the sector that can participate in haircuts and losses.”

Forex: GBP/USD jumps towards 1.5200

Fed’s Bernanke speech is due very shortly and the US NFP report is tomorrow, making the market selling Dollars ahead of the event. The GBP/USD has fully retraced its daily losses to 1.5132 on the NY opening and is now close to the 1.5200 psychological level. The current daily high is 1.5196.
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Forex: USD/CAD peaks to 1.0165 but rejects and falls to 1.0130

The US dollar is currently trading lower against its Canadian counterpart and after reaching the 1.0165, highest since April 1st, the USD/CAD has been rejected at this level with the pair falling hard to break down the 1.0140 and trade at intra-day lows at 1.0130.
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