Accepted invitation to this week’s summit in mid-January. EUR/USD under pressure in wake of comments hitting wire, presently down at 1.3700. Kinda dampens speculation that a plan to save Greece is to be hatched at Thursdays meeting.

Earlier was hearing talk of buy orders lined up down at 1.3695 to 1.3680.

• Strong dollar corresponds to overall interest of Global economy and of Europe.

Blah, blah, blah, blah.

Oh look more comments from the Greek Finance Minister and the Greek PM. Whoopeeeee.

EUR/USD steady at 1.3965, cable steady at 1.6140.  Market seems to have had enough of listening to all the comments streaming out of Davos. Infact from anywhere. Roll on US GDP.

After the earlier Trichet-induced fun and games, price action has steadied noticeably in EUR/USD.  It’s rallied back above 1.4400 from the session low 1.4379 which was reached after the ECB President further heightened worries surrounding Greece.

Russia is reported to be selling around 1.4410, which has so far helped capped the rebound.

EDIT: Talk of small stops placed through 1.4425, larger through 1.4460.

Trichet opines that bad bank assets are still a problem for the financial system. Banks need to reinforce their balance sheets.

Economic recovery is going to be “chaotic.”.

He sees permanent risk of asset bubbles developing.

EUR/USD seeing quiet trade, presently at 1.4420.  Talk of sovereign buy orders 1.4395/05, sell orders at 1.4450.

ECB’s head honcho says:

We need to disentangle what is sustainable stabilisation.  Sorry?

Reasons to be cheerful, whoops, cautious about durability of recovery of insurers’ profitability

Few solvency concerns in insurance industry, but no room for complacency

Oh dear, that’s enough of that.

Ummm, the fiscal situation in some European countries is so bad that there is a danger markets will lose faith in them.  Funnily enough the first place I thought of wasn’t a euro zone country but the good old U.K. Looks like some others may have  been of the same mind.

Cable has come under some pressure, the aforementioned sell interest up at 1.6860/80 having once again proven a durable barrier to the upside, the post CPI rally capping out at 1.6872.

Support from here lies initially down at 1.6795/00 and then 1.6775, 1.6750.

Trichet’s comment, that the fiscal situation in some European countries is so bad that there is a danger markets will lose faith in them, will be weighing on EUR/USD.

The pairing is down at 1.4910, with a Swiss private bank seen as a decent seller in this latest leg lower.

Earlier there was talk of buy orders down at 1.4900/10. Will be interesting to see whether they can arrest the present slide.

• He agrees that strong dollar is in U.S. interest
• Q-3 GDP data confirms our base scenario of progressive pick-up
• Consider our key rates to be appropriate for the euro area
• Will progressively unwind what we call our non-standard measures
• Some countries already very close to losing fiscal budget credibility
• Government deficit problem is not exclusive to France

Comments made in interview with Le Monde.

ECB’s head honcho Trichet says excess forex moves have adverse implications. It’s only a headline at the moment, so it’s not clear whether he feels recent euro strength is an excess move. I’d be surprised if he’d directly come out and say something like that at current levels, more likely to get a gentle hint here and there. 

Suffice it to say, seems fairly clear (to me anyways) that euro zone officialdom really doesn’t want to see accelerated euro strength from current levels.

EUR/USD is drifiting very slowly lower, presently at 1.4560.

ECB’s Trichet has reiterated that the global economic crisis is not yet over.

Speaking after a meeting with European Parliament President Buzek in Brussels, Trichet said “I will repeat what I said at the G20, it is not time yet to say the crisis is over.”

The ECB chief also said it was important to ensure there were credible plans to return monetary and fiscal policies eventually to a sustainable path.

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