- Juncker: EUR does not have a problem
- Rehn: Debt market tensions show need for comprehensive reform
- UK December consumer confidence index rises to 53
- USD/CNY again fixed at record low below 6.5900
- China’s FDI rose to new record in 2010
- China’s bank lending to be reduced by 10% in 2011
- Shanghai stocks +0.25% after big falls yesterday
- Other regional bourses finish +0.5% on average after being lower in early trade
- Gold steady at $1362/oz
There was a sense of risk aversion in the market in the morning session and this saw pairs like AUD/JPY and EUR/JPY get sold quite aggressively. EUR/USD had opened around 1.3290 but couldn’t rise despite the flurry of positive comments from EU’s Rehn and Juncker. EUR/USD fell to a low of 1.3253 but persistent buying from Asian central banks at that level is helping to form a base. We then saw the usual short-covering into the late afternoon session with neither bulls nor bears overly committed to their positioning. Ranges: EUR/USD 1.3253/1.3323, EUR/CHF 1.2789/1.2833
Cable benefitted early in the session from some aggressive EUR/GBP selling as the cross broke below .8345 and the pound also benefitted from the strong consumer confidence data. Cable opened in Asia on its session lows and has traded slowly higher without pullback. Ranges: Cable 1.5877/1.5939, EUR/GBP .8333/70
AUD/USD fell in early trade when the risk aversion was to the fore but with the pair mid-range between the .9800/1.0020 range edges, nobody was over committing. Short covering has taken us back to the opening level at .9935. Range: .9899/.9947
USD/JPY has again ground it’s way lower inside a tight 30 pip range. Ranges: USD/JPY 82.49/79, EUR/JPY 109.60/94.
