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Euro gets lump of holiday coal, briefly slides against US dollar

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While most of the world's currency traders were off drinking eggnog, the euro was left at the mercy of the algorithms.

[TOKYO] While most of the world's currency traders were off drinking eggnog, the euro was left at the mercy of the algorithms.

Early Monday morning in New York, the shared currency tumbled about three per cent against the US dollar in a matter of minutes. Given the limited Christmas Day volume, along with a lack of much market-moving news, the sudden plunge could've been sparked by computer-driven trading - a suspicion touted by the ZeroHedge website.

Further supporting the theory, prices proceeded to bounce back within a few hours and, by the end of the day, were little changed.

"There was nothing of substance, probably some algo-related, machine-based happening amid an absence of bids in a holiday market," said Hiroshi Yanagisawa, chief analyst at FX Prime by GMO in Tokyo.

The euro slid as low as US$1.1558 on Monday before ending the day almost where it started at US$1.1870. It was little changed in Asian trading Tuesday.

BLOOMBERG

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