The euro is being sold off. This is due to the European Central Bank (ECB) revealing that lending standards in its bank lending survey have tightened more than expected, causing expectations for a significant rate hike by the ECB to recede. The euro-yen briefly tested the upside in London early morning, driven by rising yields on German bonds, reaching a level of around 151.61, the highest since September 2008. However, it later fell back, temporarily dropping to around 150.43. The euro-dollar also had a strong start in London early morning, reaching around 1.1007 at one point, but has since erased its gains.
The euro was previously seen as a buy, but in light of this development, it is now being watched cautiously. Instead, attention is turning to the Australian dollar, which experienced a surprise rate hike today. The current position is focused solely on buying AUDJPY.
