- EUR fell across the board on newspaper reports that some European banks under-reported their exposure to risky Sovereign debt
- Widening German/Belgian spreads also undermined EUR confidence
- BoJ keeps monetary policy unchanged
- UK economy: BRC August retail sales edge higher
- President Obama proposes business tax relief to spur economic growth
- Japan’s foreign reserves increase slightly in August
- RBA and BoJ will announce latest monetray policy decisions this afternoon
- Regional equity markets steady
It’s been all about the EUR today with the single currency falling across the board. Widening Sovereign bond spreads overnight generated some unease and the WSJ reports on the EU stress tests then added to the nervousness. Selling flows in EUR/CHF helped trigger stops in EUR/USD below 1.2855 and the tone was thus set for the day. The EUR has fallen against all the other major currencies. Ranges: EUR/USD 1.2791/1.2876, EUR/CHF 1.2923/1.3029
USD/JPY has been very quiet with the market awaiting the end of the BoJ’s two-day policy meeting. EUR/JPY has fallen in line with the EUR moves. Ranges: USD/JPY 84.09/26, EUR/JPY 107.66/108.37.
The GBP has managed to make decent gains against the EUR with cable more or less unchanged on the session. The latest retial sales data out of the UK has had little impact. Ranges: Cable 1.5353/98, EURGBP .8322/64
The AUD has also had a relatively quiet session as the market awaited any news on the formation of a new government plus the latest RBA rate decision. Ranges: AUD/USD .9137/70
Markets: Nikkei -0.25%; HK, Sydney, Seoul all flat. Gold steady at $1251/oz. Oil -0.75% at $74/bbl.
