- Saudi oil minister says market trading on speculation, not supply
- CEA head Goolsbee threatens use of Strategic Petroleum Reserve
- S&P: More Euro zone downgrades coming; Greek default possible
- Iran uses tear gas on protesters
- BOJ’s Shirakawa: Don’t put too much focus on near-term CPI
- S&P 500 rises 0.9% to 1322
- US 10-year note rises 2.6 bp to 3.54%
- WTI falls $0.66 to 104.78
EUR/USD was pressured in early US trade with profit-taking on long EUR positions and talk of a shift in focus by the Fed making the rounds. A US consulting firm put out a report saying that while the Fed will complete its QE2 program, it is preparing to drop its “considerable period” language with regard to keeping rates low. That would be the first step toward hike in rates which could still be many months away. Sovereign debt concerns and the inability to rally on hawkish comments from the ECB’s Weber who said rates may rise several times this year.
EUR/USD dropped as low as 1.3863 on position unwinding before rebounding on buying from macro hedge funds (and presumably Middle Eastern accounts, though I can’t prove it). We rallied as high as 1.3927 before stalling and drifting to close mid-range at 1.3900.
USD/JPY was underpinned by the talk of shift in tone by the Fed as well by a recommendation from a US bank to buy EUR/JPY for a rally above 123.00.
USD/CHF broke through 0.9320/30 resistance and closes at 0.9353, setting the stage for a continued rebound in the greenback. Sellers of EUR/CHF are eyed in the 1.3010/20 area, traders relay.
AUD/USD bounced from 1.0055 lows amid buying from a mining company. We end at 1.0100.
DXY bounced further after yesterday’s bounce back above uptrend support. It added 0.28 to 76.79.
