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Market In Consolidative Mood This Morning: ForexLive European Morning Wrap

|Includes: CurrencyShares Euro Trust ETF (FXE)

Quite a busy morning, but not a huge amount of net change in major spot and cross rates as the market consolidates yesterday's moves.

EUR/USD (NYSEARCA:FXE) sits at 1.3360, a mere 10 pips firmer from the 1.3350 which greeted me first thing. Inbetween we've been as low as 1.3323 (Reuters) 1.3327 (NYSE:EBS) and as high as 1.3385. Real money sold early, pressuring the single currency. Reports had buy orders clustered 1.3315/25 and they worked like a charm in providing robust support.

We've seen a decent narrowing in Portuguese/German govt bond yield spreads this morning (see above) and this will have been a plus for the euro. BIS stepped in selling circa 1.3355 and this slowed the rally off the lows, but it was only temporary.

Positive comment from EU's Rehn re euro zone firewalls (see above) helped provide impetus for euro bulls to take out touted barrier interest at 1.3375 and get as high as 1.3385. There wasn't however the impetus to take on the barrier interest at 1.3400 and we've slipped back.

Cable up marginally at 1.5975 from early 1.5960 having been as high as 1.5998. Much talk of 1.6000 barrier interest and notable selling by a major French bank just ahead of said level has proven successful so far.

USD/JPY effectively unchanged at 82.80.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.