Yay for the Euro!!!
The euro is stronger on Friday after some upbeat economic data and a barrage of comments from European Central Bankers earlier in the day.
Earlier in the day Eurostat reported that industrial new orders were up 1.6% month-over-month in November, faster than forecasts for a 0.5% increase and better than the prior 1.9% pullback. Annual orders fell 1.5%, also better than expectations for a 7.1% contraction and prior 14.4% decline.
Meanwhile, on the policy front, in an op-ed piece in the Financial Times, Greek central bank head, George Provopoulos said that it will be "unequivocally easier" for Greece to resolve its problems within the framework of the euro zone.
Also of interest were comments from Governing Council Member Jose-Manuel Gonzalez-Paramo that the very idea of a European bailout of Greece from its budget problems was "absurd".
EUR/USD last traded higher by 40 pips at 1.4123 after trading in a range of 1.4066 to 1.4166 so far today. Short term support lies at 1.4066 and 1.4029. Resistance comes in at 1.4221.
While the comments and the data appear to have taken some of the negative focus away from Greece, the big questions remains how EUR/USD will react to the Obama Administration's latest initiative to limit the size of U.S. banks.
Earlier on Friday, Reuters' sources reported that U.S. Treasury Secretary Timothy Geithner is allegedly concerned that the recent measures might hurt the competitiveness of the broader financial system.
The report contrasts with an interview which Geithner gave on Thursday with PBS, where he said that banks should not use the U.S. government's safety net to subsidize risky behavior, and that financial institutions should not be allowed to become so big that they threaten the U.S. financial system.
The FX fallout from these comments are abstract given the lack of confidence from Geithner's decision. In theory, confidence in the USD could be shaken if Obama's administration doesn't appear to be behind the latest initiatives.
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