AUTOREFRESH 
New York forex wrap up; Dollar firms as reflation trade falters
- New York Fed’s Empire State index falls to -9.41 from -4.55
- IMF considers making its bonds tradeable
- IMF: US returns to growth in 2010
- IMF”s Lipsky: Dollar to remain reserve currency “as far as we can see”
- Geithner: Economy in early stages of recovery
- ECB’s Wellink: Should act firmly and quickly to remove monetary accommodation when recovery is established
- ECB financial stability report: Banks could lose $283 bln more
- ECB’s Tumpel-Gugerell: Must preemptively prick asset bubbles
- Canadian budget vote Friday a matter of confidence
- Canadian PM Harper: US deficit long-term, structural and dangerous
- Fed’s Fisher: No rate hike soon; inflation not an issue as there is too much slack in the economy
- UBS placed on review for downgrade by Moody’s
- NAHB index falls to 15 in June from 16 in May
- US yields fall after Russia, IMF comments, stock slide; 10-year falls to 3.73%
- CRB index falls 2.25%, Oil down $1.50 to $70.50
- US equities fall 2.4%
EUR/USD fell below the neckline of a closely watched head-and-shoulders pattern this morning, extending losses begun overnight. The catalyst for the final break was news that EU banks face a further $283 bln in losses over the next year, according to an ECB report. This added to pressure from comments from the IMF that the dollar should enjoy its reserve status for years to come and from a sharp unwinding of the reflation trade.
Unwinding of the reflation trade was a broad catalyst for dollar strength today. Commodity currencies were particularly pressured today. USD/CAD rose to 1.1375 intraday as the opposition Liberal Party announced they would not support the Tory budget unless they extract promises on jobless benefits. Friday’s vote is a matter of confidence, so yet another Canadian election could be in the cards; the fourth in five years. UD fell close to 0.7900 before stabilizing.
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