Meanwhile, the euro has been steady despite a report that the euro zone is once again in recession.
All this is giving Willie Williams, director of institutional derivative sales at Societe Generale, an idea.
"I like selling the euro against the yen," he told me. Economic conditions in the euro zone are only going to deteriorate further, he says. "Heading into Q4 its clear that momentum has slowed, especially in the manufacturing sector. Looking forward to 2013 the impact of European fiscal tightening will cut growth even further by an undermined amount yet substantial amount."
Williams prefers selling against the yen to selling against the dollar, he says, because "euro dollar might have some support" what with interest-rate spreads narrowing between Spanish and German debt. Also, "the uncertainty caused by the fiscal cliff has sent the USD higher as USD/EM trades are unwound," he says. When that subsides, I suspect that USDJPY and therefore EURJPY will come under pressure. (Read more: What Is the Fiscal Cliff? CNBC Explains)
Williams told CNBC's Scott Wapner he wants to sell the euro against the yen at 104.00 with a stop at 106.00 and a target of 100.00.
MULTI CURRENCIES v The Dollar
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