- Comments from US Treasury Secretary Tim Geithner that then USD had fallen far enough against the EUR and JPY and that all 3 currencies were basically in alignment, sent the USD higher across the board
- Chinese growth slows slightly, inflation accelerates
- Slight increase in Japanese corporate loan demand
- Regional stockmarkets finish slightly lower, Gold steady at $1343/oz
EUR/USD opened close to its session highs at 1.3980 but the spectre of fresh barriers at 1.4000 dissuaded traders from taking it higher. The initial reaction to the comments from Mr Geithner was to sell EUR/USD hard and fast for 100 pips before the exact comments were read. The EUR/USD then recovered to mid-range and has basically traded quietly since. Ranges: 1.3874/1.3981
USD/JPY had its first sharp move in some days, jumping sharply from 81.10 to 81.80 on the Geithner comments. Large sell orders positioned above 82.00 deterred any further buying and the pair has fallen all the way back to its NY closing level at 81.15. Ranges: 80.99/81.81
The AUD/USD fell in line with the strengthening USD but falls were limited as the market anticipated some strong Chinese data. As it turned out, Tuesday’s rate hike had more to do with inflation (producer prices were +4.3% YoY) and less to do with runaway growth (GDP was +9.6% as opposed to +10.3% last quarter). The AUD rallied slightly after the Chinese data but overall stayed inside a modest range. AUD/USD .9817/74
EUR/GBP was affected by the Geithner comments which mentioned the EUR and not the GBP, with the cross falling sharply before recovering. Ranges: Cable 1.5792/1.5848, EUR/GBP .8774/.8821
