No shortage of volatility today as weekend news that an MPC member was arguing for zero interest rates is no old news and the market is now focused on a rebound in bank shares as Barclays laid out a recovery plan.
EUR/USD is taking advantage of firmer asset markets as well as the perception that the ECB is trying to put a floor under the currency to keep the intra-European credit crisis from spinning out of control. Throw in the uncertainty surrounding the US/China economic relationship in the wake of Geithner’s comments on Thursday and the dollar is playing defense.