The Euro was able to breathe a sigh of relief today in Asia as it made gains off of recent four year lows with thanks due to FOMC Chairman Bernanke as well as a throng of short covering. At a speaking engagement in Washington D.C., U.S. Federal Reserve Chairman Ben Bernanke commented on several hot economic topics, stating that the current U.S. recovery is continuing at a moderate pace, and that EU leaders were committed to the survival of the Euro. As well he also mentioned that the EU coffers held enough reserves to meet any future sovereign debt flair ups head on. Bernanke’s comments helped to assuage recent fears and help to enhance risk appetite at least for now.

EUR/USD saw early session lows of 1.1911 erased by steady gains that sent the beleaguered currency pair to highs just north of the 1.1980 mark. Yesterday the pair dipped to fresh four year lows of 1.1875 amidst continued fear that the EU could topple like dominoes due to sovereign debt woes. The yen crosses were all well bid from the morning bell, EUR/JPY moved from 108.80 to 109.90 with improved risk buying also sending equities out of the red as the bucked the US equity decline on Wall Street. GBP/JPY touched 133.25 highs and the AUD/JPY reached 75.30 for the day, completing a 150 pip move uptown. EUR/CHF remained almost 40 pips above yesterdays all time lows near 1.3850, but the pair looked to be performing without a safety net at these levels. After New York moves higher to the tune of $35, spot gold, XAU/USD remained trapped between $1235.00 and $1240.00 for the better part of the trade day.

Although this little wave of optimism may make you feel all warm inside in regard to the Euro that feeling may not last long as traders have been methodical in their selling of rallies in the currency. Vital economic data due later in the week in the form of the ECB rate decision and press conference, Chinese data including CPI and US Retail Sales could help clear up the current economic landscape.