ForexLive US wrap-up: EUR/USD rebounds capped

• Spanish deputy ecomin Campos: Not concerned about Greek contagion, a short-term factor; funding costs falling despite wider spreads
• Fed’s Bullard: Fed should sell assets before raising rates; sales could come later in 2010
• Fed’s Yellen: China stuck with US monetary policy until it ends currency peg
• US equities slide late in session; S&P 500 falls 0.9%; European shares closed up more than 1%; Down closes below 10,000 for first time since November
• US yields close essentially unchanged; 2-year notes at 0.77%, 10- year 3.57%
• Gold closes on session lows at $1063; oil rises 0.50 to $71.73

EUR/USD attempted to rally several times during the European and US sessions but repeatedly stalled at the 1.3715 level. The last stall came in early afternoon in New York and it prompted short-term spec accounts to unwind short-term long positions. A UK and a Swiss name were aggressive sellers as prices slid back below the 1.3700 level.

European banks remain heavily pressured due to exposures across the Club Med countries and bond spreads remain near their wides for the crisis in Spain, Portugal and to a lesser extent Greece.

AUD/USD attempted a rally again today but was unable to match Friday’s 0.8718 high and sold off heavily after that. It closes the day at 0.8645.

USD/JPY was rock steady during the US session with most of the day spent on the 89.30 handle.

Cable tried to reverse the big sell off seen in Asia overnight which carried through to London this morning. From 1.5535 lows we rallied as high as 1.5660 just ahead of the London close. We lost those gains in the afternoon as dollar strength resumed, pushing cable down to 1.5600 at the close. BRC retail sales data and RICS house price data will be an focus on Asia tonight.