EUR/USD has fallen back into the 1.3830s. A story on the Dow Jones wire that German banking giant West LB was almost shut down over the weekend is helping prompt a flight to safety. For a change, the dollar is providing that safe haven role again.
Rising US yields have been a big boost for the dollar, especially on the short-end of the curve as the market anticipates the Fed will be able to take its foot off the monetary accelerator in the months ahead.
Also giving the dollar a lift is an uptick in the Conference Board’s Employment Trends survey, the first in 16 months. It rose to 89.9 from 89.5.
Central bank bids are eyed on dips toward 1.3800, where a barrier option is spotted, dealers say.
