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Posted: 20 Apr 2011 05:33 AM PDT

The euro climbed to a 15-month high in light trading as risk aversion continued to evaporate with a surge in European equities. Trading of the pound was volatile with the release of the BOE meeting minutes.

A decline in risk aversion is noticeable as European equities surged with the FTSE 100 trading up 2.20% and the DAX up by 2.77%. US equity futures are also trading higher prior to the opening bell in New York. Lighter volumes may also be supporting the large gains in equities and the euro as many trading desks are working on a skeleton staff with the approaching Easter holiday.

Towards the opening of trade in New York the euro climbed to a new 15-month high as European equities continued to rebound from Monday's sell-off following the sharp increase in Greek debt yields.

The euro is higher versus the majors with EUR/USD is trading at 1.4530 from an opening day price of 1.4397. The EUR/JPY moved as high as 120.38 before trading back to the 120.00 level. The EUR/GBP was up at 0.8860 from 0.8802.

Traders shrugged off less than expected German PPI numbers and continued to bid the euro higher throughout the European session. The report showed inflationary pressures rose to 0.4% after last month's increase of 0.7%. Economists had forecasted a rise of 0.8%.

Despite the lower than expected inflationary data the long term picture does not change as European interest rates are expected to continue to rise which should support further euro gains. EUR/USD resistance is found at the recent high at 1.4520, followed by 1.4580, and the November 2009 high at 1.5140. Support comes in at 1.4350 and yesterday's low at 1.4150.

The pound traded with higher than usual volatility following the release of the BOE meeting minutes. No change was seen in the report and the knee jerk reaction by traders was to sell the pound. The GBP/USD fell from its intraday high to a low of 1.6306 where the pair found buyers amid the risk on crowd. The pair is currently trading near its daily high at 1.6390. Resistance for the Cable is located at the recent high of 1.6425 followed by 1.6460, and the August 2009 high at 1.7040.

During the New York trading session, traders should be eying the release of US existing home sales at 14:00 GMT and crude oil inventories at 14:30.