- China raises reserve requirements another 50 bps
- N.Korean ForMin: US, South Korean actions mean Pyongyang needs to strengthen nuclear deterrent – Interfax
- Irish FinMin: Ireland to draw down external funding from aid package early in new year
- ECB’s Nowotny: Discussion of expanding European safety net not justified at the moment
- French October industrial output -0.8% m/m, much weaker than median forecast of +0.3%
- Sterling will be strongest major currency in 2011, says Barclays – The Telegraph
- Fitch: Will take several years before Ireland back to ‘A’ rated territory
- Italian Q3 GDP +0.3% q/q, +1.1% y/y, slightly up from prelim +0.2%, +1.0% respectively
- UK November output prices +3.9% y/y, weaker than median forecast of +4.1% y/y
- German November wholesale prices +0.7% m/m, +7.8% y/y
Not a huge amount of change on the morning in Europe. Where change, dollar little weaker.
EUR/USD pretty much unchanged at 1.3250. Decent US investment bank buying helped fuel an early rally. Reports had sell orders clustered up at 1.3280/00 and we got to session high 1.3282 and that was that.
We then moved lower before sovereign buying (including BIS) around 1.3230 lent support. We bounced back, but BIS selling around 1.3260 helped curtail recovery. Late morning saw price action settle down to narrow range trade.
Buy stops now noted up through 1.3310 and 1.3325.
Cable up at 1.5835 from early 1.5785. Guess everyone read The Telegraph article highlighting Barclays call for sterling to be the big cheese next year.
We rallied early but topped out around 1.5826 and fell back. Then all of a sudden mid morning, in the blink of an eye, we were on the move higher. Reports came in that an Asian sovereign had entered the markets buying aggressively. We tripped stops above 1.5825 on our way to session high 1.5861 before settling back.
USD/JPY slightly easier on day, down at 83.50 from early 83.65. US custodial was a notable seller, although the amounts weren’t said to be overly large.
AUD/USD up at .9885 from early .9850. Did dip on announcement of China raising reserve requirements, but recovered quickly. Obviously some relief they hadn’t signalled an actual interest rate rise.
