A relatively quiet session ended with the dollar losing further ground against most major currencies. Dealers reported little in the way of real money flows today, with trade for the most part being dominated by short-term speculative accounts. EUR-USD touched 2+ months highs, but ran into offers on each attempt over 0.8800.
Early on, a German name was noted selling ahead of 0.8800, reportedly option related business. Following the NY option cut, the same name was seen on the other side of the market, buying the pair to near session highs. Though unable to break decisively higher, the fact that the pullbacks were extremely limited gave some hope to EUR bulls.
Elsewhere, USD-JPY pressed well into the mid 123s, here too though, there was little flow activity reported. Overall, the USD is expected to remain under pressure for the near term at least, as fear of a longer and deeper than expected US economic slowdown ultimately is likely to weigh on the greenback.
On the data front, Thursday brings Q2 ECI data, with Standard & Poor's looking for a 0.9% rise quarter over quarter, and a 3.9% increase year over year. Also on tap, June durable orders/shipments, with S&P forecasting a -1.0%/-0.5% reading.