- Portugal’s PM Socrates resigns after austerity measures defeated
- Japan posts trade surplus in February
- French deal to take control of Asian insurance businesses nears completion; may explain AUD buying of last few days
- Strong PMI data out of China shows solid growth alongside falling prices
- Moody’s set to downgrade Spanish banks
- EU bailout package delayed again
- Regional bourses +0.7% on average; Gold steady at $1438/oz; Oil $105.30/bbl
The EUR has survived some fairly negative headlines, thanks mainly to solid demand from Sovereign players below 1.4070. The bounce off the lows has not been spectacular so the danger for EUR/USD bulls is far from over. The first fall came when the Portugese PM announced his resignation after his austerity-measures bill was defeated in parliament. The next sell-off was inspired by some Dow-Jones headlies that Moody’s will downgrade Spanish banks (not unexpectedly I might add). Both dips were limited to 1.4075 and any subsequent attempts to break below 1.4070 have also failed. EUR/CHF demand late in the session has helped the bull cause. Ranges: EUR/USD 1.4068/1.4114; EUR/CHF 1.2785/1.2831; EUR/JPY 113.90/114.21
USD/JPY has again been quiet with most traders now happy to wait for a break of the 80.50/82.00 holding range before committing themselves. Range: 80.81/81.05
USD/CHF rallied late in the session on some EUR/CHF flows. Ranges: USD/CHF .9072/.9114
Cable was rangebound 1.6231/67 and EUR/GBP .8660/85 saw some swings in line with EUR sentiment changes.
AUD/USD looks like it’s boost of recent days has come from an AXA/AMP M&A deal, but we’re still unsure as to how much is already done. Ranges: 1.0119/45.
