EUR Staged a Rebound In Europe

Euro staged a rebound in Europe on short-covering after Tuesday's selloff and price hit an intra-day high of 1.4361 before easing.

However, with the Chicago PMI report revealing overall strength in U.S. economy and rise in production (new orders and employment were particularly encouraging), the single currency dropped briefly to a low of 1.4273 in NY morning before staging a rebound in NY afternoon.

In other news, Euro zone M3 money supply growth showed a surprise fall in Nov while loans to the private sector fell at a less pronounced rate than had been expected.

Cable extended Wednesday's selloff and fell to a 11-week low of 1.5832 in European mid-day due to ongoing worries over the U.K. economy and rising public debt.

The decline was also in part due to thin market condition. However, the British pound staged a strong rebound in NY session triggered by active cross-buying in sterling.

Eur/gbp posted its biggest decline in more than two months, falling from 0.9055 to as low as 0.8911 and cable reached an intra-day high of 1.6095 in NY afternoon before stabilizing.