By Cornelius Luca
New York, June 12 (BridgeNews) - The euro spiked up 80 pips from a new 6 1/2-month low of 84.15 cents to the dollar on incorrect rumors that some of the smaller European central banks had been in the market to support the ailing currency. Since the euro zone fundamentals remain weak, with recent data pointing toward stagflation, the euro continues to provide good selling opportunities.
* * * Sterling/dollar benefited from the euro/dollar's bounce and crawled its way into positive territory from a fresh 15 1/2-year low of 1.3688 on profit taking.
Euro's rebound was underpinned by Bank of France Governor Jean-Claude Trichet, who repeated his mantra -- reminiscent of ex-Treasury Secretary Robert Rubin's strong dollar policy -- that a "strong, solid single currency is in the best interests of the European economy." He said the level of the euro remains a key indicator for ECB monetary policy, which he described as being "balanced" now. Dollar/Swiss franc fell in turn from a 6 1/2-month high of 1.8068.
Dollar/yen slipped from a 20-day high of 122.08, while euro/yen's rebound from a four-day low of 102.44 failed to match Monday's 13-day high of 103.86.
Dollar/Canada rose to a five-day high of 1.5244 on short covering after apparently bottoming out Monday at a four-month low of 1.5154. Its recovery was signaled by a bullish reversal signal (doji) on the daily candlestick chart.
The U.S. event agenda consists of speeches by Federal Reserve Bank of Minneapolis President Gary Stern in the morning, Federal Reserve Bank of New York President William McDonough in the afternoon, and Federal Reserve Governor Edward Gramlich in the evening.

Current Previous Change Global Global
NY open NY close low high

USD/JPY 121.73 121.90 -0.17 121.55 122.08
EUR/USD 0.8472 0.8432 0.0040 0.8415 0.8495
EUR/JPY 103.12 102.85 0.27 102.44 103.40
GBP/USD 1.3768 1.3716 0.0052 1.3688 1.3790
USD/CHF 1.7962 1.8036 -0.0074 1.7930 1.8068
USD/CAD 1.5236 1.5194 0.0042 1.5185 1.5244
AUD/USD 0.5247 0.5216 0.0031 0.5204 0.5255
NZD/USD 0.4184 0.4170 0.0014 0.4166 0.4191
SP.1 1263.50 -2.50 1262.10 1267.50
ND.1 1860.00 -11.00 1852.00 1883.00