- “Accomodative policies will likely be warranted for an extended period, but that at some point, however, as economic recovery takes hold, we will need to tighten monetary policy to prevent the emergence of an inflation problem down the road” Fed’s Bernanke, opinion piece in WSJ entitled “The Fed’s Exit Strategy.”
- Swiss trade surplus 1571.7 mln in June from 1996.1 mln in May, exports of metals, watches hit particulalry hard.
- The Banks that wouldn’t lend. Experts warn of new credit crunch in Germany – Der Spiegel
- UK June public finances (PSNCR) £18.980 bln, better than median forecast of £20.2 bln, but still highest June deficit on record. Public sector net borrowing £13.002 bln, better than median forecast of £15.5 bln. Horrible data
- BOE’s Bean: 20% fall in sterling since start of crisis should help boost exports. Banking sector still fragile, still neends to deleverage - Newspaper Interview
Bad morning for sterling, which has posted across the board losses.
Cable has given up around a full cent, presently down around 1.6415. The move lower was accelerated when stops below 1.6500 and 1.6450 were triggered and we’ve been as low as 1.6401 so far. Noted buy orders at 1.6400/10 have just about help the line, so far.
EUR/GBP has advanced to .8660 from an early .8605. Talk of a UK clearer selling in .8630/40 area did little or nothing to inhibit the rally.
There was evident caution ahead of the public finance data, and although better than expected (see above), it still makes uncomfortable reading.
EUR/USD came under pressure early, but decent demand out of Eastern Europe (could well have been Russia, but no direct confirmation of such) in the 1.4180/90 area provided a base for a subsequent rally. Talk of sell orders up at 1.4250 and then at 1.4285 up through 1.4300.
USD/JPY has firmed a little, up about 30 points at 94.20. Talk of good demand for the EUR/JPY cross down at 133.00/20 will have lent USD/JPY underpinning.
