Euro too cheap, Germany's Merkel says

Europe's single currency is too cheap, German Chancellor Angela Merkel said, helping to send the greenback to its lowest levels since early October.

Merkel told an audience that the European Central Bank's accomodative policies had weakened the euro and made German goods cheaper.

That contributed to a drop in the US dollar spot index of 0.28% to 96.87 as of 15:50 BST.

In parallel, cable was off by 0.10% to 1.3024 but above an intraday low of 1.2965, while the euro was putting on 0.38% to trade at 1.1250.

The German leader's remarks came on the back of the latest weekly CFTC data which showed the number of net longs from speculators reach a 52-week high of 37,604 contracts.

According to technical analysts at Web Financial Group, although bounces were likely along the way there was no technical support for the US dollar spot index until 95.90.

A close below that level might see it extend its drop towards the 91.90 to 92.00 point area.

For euro/dollar, if 1.1299 were overcome the next level of technical resistance lay at 1.1616.