Euro Rises Strongly In NY Ahead Of ECB Meeting

The single currency rallied in New York session on Monday as investors adjusted their positions ahead of the European Central Bank meeting on Thursday.

The single currency met renewed selling below last Friday's New York high at 1.3090 in Australlia, price ratcheted lower in Asian session and reached an intra-day low of 1.3017 in European morning due to cross selling of euro versus yen and sterling. However, the strong rebound of the euro crosses pushed the pair above said 1.3090, euro eventually climbed to a high of 1.3120 in late New York.

Although the British pound edged lower in tandem with euro from Australian high at 1.6082 to 1.6022 in Asia, the pair ratcheted higher in European session due to active cross buying of sterling euro and the strong rise in EUR/USD pushed cable above said 1.6082 to a high of 1.6118 in late New York.

Versus the Japanese yen, although the greenback rose to 88.38 in Australia, failure to re-test Friday's 30-month high at 88.44 triggered another round of profit-taking and price dropped to a low at 87.62 in European morning due to active cross buying of yen versus euro before briefly recovering to 87.96 in New York morning.

In other news, German Economic Minister Roesler said "expects robust growth in Germany also in 2013, weakness only temporary." Japanese Finance Minister Taro Aso said on Sunday the need for bigger monetary and fiscal stimulus to revive the economy, but also said the government will not insist on issuing a written policy accord with the central bank on a new inflation target.

On the data front, eurozone Sentix investor confidence in January came in at -7.0, better than the forecast of -15.2 and -16.8 in December. Eurozone PPI came in at -0.2% m/m and 2.1% y/y, versus the forecast of -0.2% and 2.4% respectively.

Data to be released on Tuesday:
U.K. BRC retail sales, Swiss unemployment rate, Germany Export, Import, Trade balance (euro), factory orders, Italy unemployment rate, EU Retail sales, Business climate, Economic sentiment, Consumer sentiment, Unemployment rate, U.S. Redbook retail sales.