New York forex wrap-up: Risk goes, then comes

• Bank analyst Merideith Whitney expects Goldman to beat estimates tomorrow
• Geithner: Confident government has the resources to deal with CIT
• Russia uses oil price of $54 for budgeting purposes for 2010
• Bank of Canada survey: Business outlook upbeat
• Bank of England’s Bean: Nine months before we know if QE policies were successful
• US June fiscal deficit $94.3 bln versus $33.5 bln June 2008 surplus. Year to date deficit exceeds $1 trln
• S&P 500 rises 2.4% to 900
• Oil falls to $58.30 before rebounding to end just below $60.

There was a flurry of risk aversion early in the US session as jitters over the fate of small-to mid-market lender CIT was a concern for the market. Reassuring comments from Treasuries Geithner helped settle the jitters and comments from bank-bear Whitney that Goldman Sachs would beat forecasts helped brighten the mood considerable. After failing to close below key supports in the 875 region late last week, the S&P rebounded on short-covering today, and helped drag the “risk trades” in the FX world higher. GBP recouped it’s overnight weakness, ending at 1.6230. EUR/USD brushed 1.4000 late from 1.3911 early in the day.

USD/JPY reached 93.00 and EUR/JPY, 130.15/20; AUD ended on its best levels of 0.7831. The market was a one-trick pony today, I’m afraid.

Goldman earning before the open in NY tomorrow will be the early focus before US retail sales numbers.