Reports that the ECB may be worried about the value of the euro and that this could delay QE tapering seem to have been exaggerated. The “source” report sent the euro down on the last day of August, but it is recovering as an official source has something else to say.
Ewald Nowotny, the head of Austria’s central bank, does not seem too excited about this. He does not want to “overdramatize” the impact of the strong euro on the economy. And he is happy with the economy it seems.
His comments support the euro, which bounces from the lows and recaptures the 1.19 level. Can it advance to even higher ground? Not so fast. The US Non-Farm Payrolls report awaits us and it will probably not be a disaster. Reaching the peak of 1.2070 see earlier this week seems like a stretch. However, the euro enters the NFP in a more resilient manner than earlier.
Here is the chart. Tension will grow towards the big meeting on September 7th.
