- Chinese stockmarket -2.5%, HK -1.8%
- Inflation becomes an increasing problem in China
- General election looks likely in Ireland but next month’s budget likely to pass
- Reduced flows in FX market due to Tokyo holiday
- Gold steady above $1360/oz, Oil -0.5%
The positive sentiment which greeted the EU/IMF bail-out package for Ireland gradually receded and turned outright bearish in late NY trade. News that a general election was to be called sent the EUR/USD tumbling but later reports that this won’t happen until January and that next month’s budget will pass, allowed the EUR to recover somewhat.
The EUR/USD low in NY trade was at 1.3575 and we opened in Asia at 1.3625. There was little or no movement for the first 3 hours of trade but some sizeable EUR/CHF selling sent the EUR/USD back below 1.3600. The cross fell by 60 pips in a short time and hasn’t really rallied since. There were rumours in the interbank market of more Greek-related debt woes and this also weighed on the EUR. EUR/USD fell below 1.3575 and triggered stops in the process at the same time as EUR/JPY stops below 113.15 were triggered. The EUR/USD high since the low has been 1.3593. Ranges: EUR/USD 1.3551/1.3633, EUR/CHF 1.3422/91, EUR/JPY 112.95/113.57
USD/JPY has had a quiet 83.25/38 range with Tokyo on holiday.
AUD/USD has traded .9854/89, moving up and down in this tight range on a number of occasions.
Cable has followed the EUR/USD to a large extent in a 1.5925/64 range; EUR/GBP .8509/42
