- Eurozone CPI for July +1.7% YoY, exactly as expected
- China still buying Japanese and European debt ahead of US Treasuries
- ECB Stark: EZ fiscal reform will lead to increased growth and revenue
- US Treasury yields continue to fall
- European equity markets fall by less the 0.5% on average
- Gold up $5 to $1225/oz
EUR/USD technical support at 1.2735/40 was tested during the Asian session and the fact that it held will have given EUR bulls some heart. EUR/USD opened the session just above 1.2780, rallied immediately to 1.2835 before falling back as EUR/CHF came in for some heavy selling. 1.2780 again proved the low on the dip for the EUR/USD and it has spent the rest of the session in a fairly tight range. EUR/USD 1.2780/1.2836, EUR/CHF 1.3268/1.3435.
USD/CHF was again the leader in terms of volatility and interbank dealers again put the CHF buying down to safe-haven flows. Range: 1.0350/1.0503
USD/JPY has drifted lower over the last few hours with the move lower in USD/CHF and the lower T-note yields the main drivers. Range: 85.55/97
Cable has been affected by GBP/CHF flows with the pair falling 250 pips, 1.6380 to 1.6130, through the session. Cable continues to be supported by Asian and Middle Eastern Sovereign bids through 1.5550. Ranges: Cable 1.5551/1.5644, EUR/GBP .8178/.8227
AUD/USD .8888/.8953, USD/CAD 1.0366/1.0432
