December 21st, 2010 23:16:25 GMT

Sterling’s woes continue…

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After last night’s PSNB record number we saw Cable ‘suffer’ a blow down to the 1.5430s and it is struggling to hols well in any meaningful way at the moment; EUR/GBP briefly got back above 85.00 but dipped back with further Euro weakness.

Tonight we have UK GDP, Current Account and MEPC Minutes; any negativity accompanied by further Euro weakness should see the Cable tested and I feel further downside will test 1.5300 and we will see the 85.00+ again quite easily.

5 Comments

December 21st, 2010 22:27:12 GMT

Aussie underpinned the last few days…

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regardless of the downward pressure on the Euro. One of the ‘big four’ Australians has been on the bid constantly I hear and I believe from a snippet I picked up last week that this may be for a large fund that found themselves underweight the currency for year end. By the price action and the fact that it remains bid I repeat my comment from friday ( NYK time) that I would not be surprised to see a short covering spike if the constant bids stay around,

This morning we shortly have the Australian MI Leading Index…not gonna move the market tho’ ;-)…last print was flat..0.00%

We also have the Japanese Trade Balance and GDP

1 Comment

December 21st, 2010 22:18:23 GMT

ForexLive Asian Session Open: Same trend, different day

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The Euro continues to be pressured as we drift into Christmas with thin markets and traders wanting to keep the risk levels low.

The CHF remains strong but the other star is the AUD; both remain very firm on crosses with EUR/CHF at 1.2550, AUD/USD 0.995 and looking to test sellers at parity again and AUD/JPY 83.60

USD/JPY still looks to be well supported at 83.50 with stops below 83.40 and I favour remaining long AUD/JPY.

4 Comments

December 21st, 2010 21:21:04 GMT

ForexLive US wrap: Even China can’t defend the euro

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  • Fed renews central bank swap lines until August, 2011
  • Eurogroup’s Juncker: Euro not endangered; talk of its demise is “unscientific blabber”; euro zone bond idea has merit
  • Irish president signs bank bailout bill instead of sending to Supreme Court for review
  • Fitch becomes third ratings agency to put Greece on review for a downgrade
  • Spain passes 2011 budget
  • S&P 500 closes at highest level since Lehman collapse at 1255
  • US 10 year note closes at 3.31%, down 2 bp; copper closes at record high

EUR/USD tried to rally in early US trade but it failed in the low 1.3190s and soon fell back sharply. Multiple ratings reviews for European sovereign and bank debt downgrades weighed on the market again today as did fears that Ireland’s banking bailout law would be sent to the Supreme Court for review.

The Irish bill was instead signed but EUR/USD was only able to bounce marginally from session lows at 1.3073, closing now around 1.3098, the 200-day moving average. Solid demand was seen at the 1.3080 level on the way lower, traders reported.

Sovereign debt fears remain intense despite overnight comments from China that they support the EU crisis response. A fresh record low in EUR/CHF is the best evidence that the market remains very much on edge. We slipped as low as 1.2545 and close only 10 pips above those lows.

USD/JPY dipped to test bids from Japanese institutional investor Kampo at 83.50 before bouncing to 83.90 as EUR/USD plumbed its worst levels. Higher US yields (3.38% for a time) helped spur the bounce as well.)

GBP/USD was weighed down by horrible public borrowing figures this morning, a scandal-ette surrounding UK business secretary Vince Cable and broad USD strength all played a role. It dipped as low as 1.5437 before stabilizing to close at 1.5465.

Commodity currencies were mixed with the Loonie quiet steady and the AUD quite firm. Record high copper prices are helping underpin the OX, which orbits just below the 1.00 area, closing at 0.9970.

2 Comments

December 21st, 2010 20:09:35 GMT

USD/JPY eases as bond yields revert to opening levels

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Pretty choppy trade in 10-year notes, swinging between 3.30% and 3.38% today. Since miidat we have fallen from 3.38% back to the 3.32% level.

USD/JPY? You guessed it. It fell back to 83.73 from 83.90 highs.

EUR/USD has bounced back toward that 200-day moving average once again, now at 1.3097.

We bottomed at 1.3074 around 90 minutes ago.

2 Comments

December 21st, 2010 19:56:22 GMT

Comments function

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We’re experiencing problems with the comments function on the site. The techs are aware of it and are working on a fix. I’ll keep you posted.

7 Comments

December 21st, 2010 19:51:18 GMT

Spain passes 2011 budget

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We can now all rest easy in our beds now that Spain has passed a strict austerity budget for 2011. Crisis solved…

Yeah, right…

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December 21st, 2010 19:45:42 GMT

US Senate Passes Stop-Gap Spending Bill; House Vote Next

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–Senate Votes 79 To 16 To Pass Spending Bill Until March 4
–House To Take Up Stop-Gap Spending Bill Later Tuesday

By John Shaw

WASHINGTON (MNI) – The Senate voted Tuesday to approve a stop-gap
spending bill to keep the government running until March 4.

The Senate voted 79 to 16 to approve the bill.

The House returned to Washington Tuesday to vote for the stop-gap
spending bill and handful of other items. The House is expected to pass
the stop-gap funding bill later Tuesday.

The current stop-gap spending bill that funds the federal
government expires tonight at midnight.

Several weeks ago, the House passed a year-long stop gap spending
bill that would have funded the government for the rest of fiscal year
2011 at fiscal year 2010 spending levels.

Senate Democrats tried a different approach, combining all 12 of
the regular spending bills into an omnibus package. But Senate
Republicans balked at the measure’s $1.1 trillion cost and it’s length
at nearly 2,000 pages as reasons for blocking the measure.

Republicans also cited the measure’s inclusions of hundreds of
earmarks as a reason to oppose the omnibus spending bill.

Congress has not passed any of the 12 regular spending bills for
the 2011 fiscal year that began Oct I. A series of short-term spending
bills has kept the government funded.

** Market News International Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$,MCU$$$]

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