Forex News | Currency News by Forexlive

Personal income and spending data usually don’t move the market, but embedded in that report is the savings rate, a number the market has become very interested in. As the US economy has weakened and consumers have worked to repair balance sheets, spending has fallen and savings has risen.

This is a long-term economic plus for the dollar, as it helps balance the current account deficit but it is a short-term negative, as it signals the consumer-driven US economy will be slow to mend without the usual high consumption levels. A classic Catch-22.

Incomes are expected to be flat in September with consumption seen falling 0.5%, which would imply a rising savings rate.

Reuters reporting traders saying no SNB intervention, only jitters. I was told by couple of contacts they were in, what can I tell ya.  EUR/CHF and USD/CHF settling back a little, presently at 1.0215 and 1.5130 respectively.

UPDATE: We are hearing SNB bought USD/CHF on EBS.

Well you were warned. Hope somebody made a bundle. EUR/CHF up at 1.5145 (been as high as 1.5171), USD/CHF at 1.0225 (been as high as 1.0237)

EUR/CHF is trading below 1.5100, presently at 1.5090,  very nearly at 1.5o80 where the SNB is last said to have intervened……….

ECB’s Juergen Stark is sounding the warning bell.  The official says rampant government spending to counter the financial crisis could have long-term implications for the economy and interest rates.

Stark said in an op-ed in the Frankfurter Allgemeine Zeitung, that solid public finances are a prerequisite for sustainable growth, warning “Therefore it is crucial not to miss the right time for the exit from crisis-orientated fiscal stimulus” adding “A further excessive expansion of public finances could have serious consequences for long-term interest rates, economic developments, the stability of the euro zone and therefore not least the monetary policy of the European Central Bank.”

Well, you’ve got my attention Juergen!!!

Stark also said there are increasingly clear signs of an economic recovery next year.

Is that there is talk of possible “sterling sales” as well. Interestingly EUR/GBP is trading a little firmer on day, presently at .8985.

News saw knee-jerk sell-off in cable before subsequent recovery.

The fact they’re the smaller building societies will be helping cable regain it’s poise.

Here we go, link to Goodhart’s comments.

Right,  now I’ve got a second to draw breath I’ll give you my take on Mr Goodhart. He is only one man (ok he’s ex-MPC) giving an opinion and the comments don’t seem that definitive at all to me. I’d also like to point out, that over recent months the track record of ex-MPC members in second quessing the current team hasn’t been very stellar at all.

I think this next decision is the hardest to call in months, and I wouldn’t be at all surprised if QE were expanded further.

Cable keeps threatening to take off, but has so far disapppointed. Wallowing around 1.6540

EUR/USD is recovering nicely from the 1.4806 session low posted a little earlier, presently back up at 1.4840.

Unconfirmed talk of an Asian sovereign buying around the lows. Talk of light month end USD sales lined up for fixings also underpinning, with talk of buy orders lined up down at 1.4790/00.

Up and down, and up and down, and really going nowhere, so far. Cable sits at 1.6545, almost slap bang in the middle of todays range.

Thanks to John B for alerting me to fact, ex-MPC Goodhart’s suggestion that BOE “may pause QE for some time ” as being flagged as factor underpinning sterling.

Just looks pretty well-underpinned to me anyways,  even without that.

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