The euro was down intraday as investors were afraid that problems of Deutsche Bank may spill over the entire eurozone banking sector. Yet the currency managed to close above the opening level as fears receded.
European shares went sharply higher on Friday as the situation with German’s biggest bank was improving. There were reports that the bank is close to settlement with the US Justice Department, which charged the bank with selling toxic mortgage bonds. Additionally, experts speculated that the Lehman Brothers scenario is unlikely in this case, therefore excessive fear is unwarranted.
As for economic data, there were plenty of reports from the eurozone, but they were mixed, giving the euro no direction. Of particular note were region’s inflation that accelerated from 0.2% in August to 0.4% in September and German’s retail sales that dropped 0.4% in August from July.
EUR/USD closed at 1.1240 after opening at 1.1221 and falling to the low of 1.1153 during the trading session. EUR/GBP opened at 0.8652, dropped to the daily low of 0.8603 but rebounded to close at 0.8659. EUR/JPY was up from 113.33 to 113.87, bouncing from the session minimum of 112.59.
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