- Democrats and Republicans agree on a deal to raise the debt-ceiling; it will be voted on tomorrow
- USD/JPY and USD/CHF opened higher after very weak closes on Friday
- Regional stockmarkets surge by up to 2%, Gold falls by 1%
- Market still wary of possible US debt rating downgrade as analysts pore over deal details
- China official PMI 50.7 in July, down from 50.9 in June but still better than expected
- HSBC China July PMI 49.0
- USD/CNY fixed at record low at 6.4399
- South Korea CPI grows faster than expected at 4.7%
USD/JPY and USD/CHF had a very weak close last week as the market worried about the unlikely prospect that the debt-ceiling would not be raised. The very poor GDP revisions in the US also didn’t help. News this morning that a deal was close helped USD/CHF rally immediately to .7940 from its NY close at .7855 and USD/JPY rallied even more, up to 77.60 from a NY close at 76.70. EUR/USD and cable fell briefly but were supported by short covering in the CHF and JPY crosses.
USD/JPY pulled back to 77.10 from the initial highs but accelerated higher on the Tokyo open, taking out stops above 77.70 and 77.90 before stalling at solid selling interest at 78.00. Range: 77.10/78.00
USD/CHF has pivoted around .7930 after the initial surge, trading .7900/51 overall.
EUR/USD fell on the initial surge of USD buying but rallied on short-covering in the crosses and will close the session near its NY closing levels. Range 1.4344/94, EUR/CHF 1.1355/1.1436, EUR/JPY 110.69/112.23
AUD/USD has ground its way higher today with the market still worried about a possible rate rise tomorrow. The better than expected Chinese official PMI certainly helped as did aggressive short covering in AUD/JPY. Ranges: 1.0985/1.1060
NZD/USD posted a new record high at .8840.
