A combination of EUR weakness and USD strength drove EUR-USD back towards 1.13 yesterday. There were no data publications or other news that had triggered the move. Even though Greece was once again dominating the headlines, the FX market has long since stopped to show much enthusiasm for the toing and froing of the European politicians. Instead yesterday’s move illustrated that the market continues to believe in the divergence between US and euro zone monetary policies. Even if the recently weak US economic data notably shook the confidence in this belief, as long as the confidence was not completely ruined by further disappointing US data, EUR-USD is likely to move further south on quiet days, says Commerzbank.
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