- US June trade deficit $-49 bln, worse than median forecast of a $42 bln deficit. June exports -1.3% vs +2.5% in May, imports +3.0% vs +2.8% in May
- US July budget deficit $165.04 bln versus median forecast of $169 bln
- Canada June trade balance C$ -1.13 bln deficit, worse than median forecast of a C$ -0.3 bln defcit
- Slovak parliament rejects 816 mln bilateral loan to Greece, but clears country’s participation in euro zone safety net (EFSF)
- Japanese fx intervention to curb yen rise would not be welcomed in Europe – Euro zone official
Not a good day for the euro, which has lost ground across the board. A combination of factors have weighed; rekindled worries over euro zone sovereign debt, lingering worries over health of European banking sector and a large dollop of general risk aversion as fears increase over global growth prospects.
EUR/USD is down at 1.2885 from early 1.2990, having been as low as 1.2864 at one stage. Given that Asian central bank selling has been a big feature of the past 24 hours or so, it’s probably only right and fitting that an Asian sovereign buying down around 1.2870 has lent much-needed support.
EUR/JPY is down at 109.80 from an early 110.15 while EUR/GBP is down at .8218 from early .8283.
USD/JPY up at 85.25 from early 84.80. Got as high as 85.49 at one stage, but couldn’t take out well-noted sell orders at 85.50. Real money and US custodial buying notable today.
USD/CAD up at 1.0460 from early 1.0390. The release of poor trade data (see above) certainly didn’t help the loonie’s cause.
AUD/USD down at .8990 from early .9016, the pairing undermined by the general risk averse backdrop. BIS seen buying around .9020 lent fleeting, but not lasting, support.
GBP/USD at 1.5675 effectively unchanged on the day. Strong selling of the EUR/GBP cross helped provide support. Some of the EUR/GBP selling was said to have been due to one off Uk pharmaceutical interest. Said to be related to dividend payment. China was also seen buying the pairing (cable) today which will also have helped damage limitation.
