Here is one of the big reasons the euro is above 1.18

Europeans are back in love with the euro

The latest Eurobarometer survey found that 73% of eurozone citizens support the euro, the highest percentage since 2004.

The combination of a strengthening economy, the unifying force of Trump in the US, Brexit, and the failure of populist candidates at home has created some optimism in Europe for the first time in a long time.

The measure was at an all-time low of 62% in 2012 but has steadily climbed higher.

Luxembourg had the highest support at 85%, followed by Slovenia at 83$, Ireland at 83%, and Estonia 83%. Worryingly, support was lowest in Italy at 58%.

Merkel wins again.

How Brexit Changed the way Pound Sterling is Traded Across Different Timezones

The Brexit vote in June 2016 didn’t just lower the value of the Pound exchange rate, it also changed age-old patterns in the way Sterling is traded in the different time-zones that make up the 24-hour FX market.

Before Brexit, “GBP/USD used to weaken during the Asia and London morning but strengthen during the common London-NY and NY afternoon sessions,” says Deutsche Bank’s Oliver Harvey.

Deutsche Bank - one of the world's largest foreign exchange dealers - have released their latest findings into how global markets now perceive the UK currency and in which timezone it will most likely benefit or suffer.

“In the aftermath of Brexit, however, Asia and the London morning turned slightly bullish, while the combined London/NY session, representing peak liquidity, saw systematic selling of the Pound,” he continued.

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Reactions to the July US non-farm payrolls report

Steven Englander, Rafiki Capital:

"I think it is good but not good enough. You would have needed a little bit more strength on earnings and a little bit more strength on the NFP to convince the market. Now we are in a situation where we have of pretty good growth but still a flat Phillips curve. Where we are is, no pressure on short-term rates to go up really because you don't have inflation, and that reinforces that September looks good for balance sheet reduction.

"In terms of market dynamics, the fixed income market has priced itself into an extreme. The upward move we have seen in 10s and 2s will probably be retained. I think this will be seen as a dollar selling opportunity. Basically, that the dollar won't be able to keep its initial gains. I think there are still plenty of plenty of wannabe dollar sellers. In terms of the three year dollar accumulation cycle, that hasn't been fully unwound and there are still plenty of people looking to unwind it."

Royce Medes at CIBC:

"All told, the upside surprise on the headline number will be modestly positive for the U.S. dollar and negative for the fixed income, but this is still an important step in the right direction for Fed-watchers that had seen a soft opening to Q3 based on earlier-released survey measures."

Mohamed El-Erian, Allianz chief economic adviser:

"History tells me not to give up as yet, but the data has been disappointing. We are going through a soft patch, and it seems to be a prolonged soft patch," El-Erian said Friday in an interview on Bloomberg Television. "I'm getting more and more worried, but hopefully history will assert itself."

Bart Melek, head of commodities research at TD Securities:

On gold, "It looks like we'll be falling for the next few days."

Neil Jones, head of institutional FX sales at Mizuho:

"It's a Goldilocksy number... it may help keep USD/JPY gently bid."

Matt Boesler, Fed reporter at Bloomberg:

The composition of that 4.3 percent headline unemployment number is starting to look a lot better all of a sudden too: the percentage of unemployed workers who weren't just on temporary layoff plunged in July to 33.4 percent, the lowest since Nov. 2006

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