By XE Market Analysis
The Dollar more than reversed intraday losses it saw against most currencies, and the USD index (DXY) was showing a fractional gain heading into the New York interbank open, at 95.28, up from the two-session low seen earlier at 94.88. EUR-USD concurrently fell by 50 pips to levels near 1.1590, leaving the 1.1644 two-session high in its wake. The common currency itself underperformed, correcting after a phase of outperformance, with EUR-CHF tumbling by some 40 pips in returning to the 1.1300 level, while EUR-JPY took a 70 pip spill. The correction in the Euro came as BTPs erased early-session gains, and despite an above-forecast German ZEW investor confidence reading for September (which, at -10.6, still showed pessimists outnumbering optimists, and remaining well off its long-term average of 22.9). Sterling dropped sharply after initially rallying in the wake of the July UK labour market report, which showed unexpected strength in wage growth. There didn't appear to be any news development behind the sudden U-turn, which seems to be a case of a large block of selling from an account that sought to take tactical advantage of the post-data rally in the Pound. Cable dove to a low of 1.2989 after printing a post-data high at 1.3082, and has since steadied around 1.3020-50. AUD-USD saw some chop, lifting to a 0.7128 high after seeing a 31-low at 0.7092 after disappointing August business confidence data out of Australia. The pair subsequently fell back to the 0.7100 area.
