EUR/USD inter-markets: recovery appears limited

EUR/USD has managed to come back after bottoming out in the 1.1040 area early in the European session, currently testing the 1.1080/85 band along with a slow recovery in the risk appetite trend.

In the same direction, ‘Brexit’ fears appear somewhat alleviated today, sustaining the rebound in the risk associated space. The extent and sustainability of the bounce remains doubtful, however.

Volatility tracked by VIX has climbed to fresh highs reflecting the shift in sentiment for the time being, while the better tone from German money markets are currently adding to the recovery in EUR.

The greenback, gauged by the US Dollar Index, keeps the choppy trade above the 96.00 handle, although deflating from earlier tops as market participants wait for the FOMC minutes later in the NA session.

According to prior surveys, the Committee could deliver a dovish statement today, although its impact would surely be watered down by the prevailing concerns over the recent ‘Brexit’ vote and its potential political and economic effects in both the UK and Euroland.