FOREX TRADERS

[jdz]

Most of the damage was done in EUR/USD before the US entered
the fray, but prices did make a session low around 1.2512 near the 15:00 GMT
London fixing. Dealers noted forced hedging by asset managers and overlay
accounts as the USD displayed unexpected strength across the board today despite
continued chaos in the Middle East. Even glimmers of hope for a near-term
cooling of hostilities late in the day could not lift EUR/USD as stale longs
sell into anything resembling a rally. 1.2545/50 capped bounces intraday.
Prices tumbled in Europe this morning with the growing realization that no
amount of bad news was going to knock the USD off its stride. Selling from an
Eastern European central bank (one usually seen buying on dips rather than
selling) helped send prices cascading through 1.2600, 1.2575 and 1.2550 stops.
1.2475 barrier options expire tomorrow and will be a major focus for the market
overnight. Position adjustment, safe-haven buying, what ever you want to call
it, the USD retains a strongly bid tone while gold and oil give back recent
gains. PPI and TIC data are a modest focus tomorrow before a big day Wednesday.
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