• S.Korea fx authorities buying dollars to curb won’s strength – traders
  • Russia central bank shifts lower bondary of rouble band to 34.55 vs basket after buying $700 mln – traders. Shifts bondary second time during morning to 34.50
  • French January trade balance -3.681 bln euros, slightly better than median forecast of -4.0 bln – customs office
  • Swiss February CPI +0.1% m/m, +0.9% y/y, slightly weaker than median forecasts +0.2%, +1.0% respectively
  • UAE FinMin: Expects Dubai debt issues to be resolved soon
  • French EconMin Lagarde: Idea of European Monetary Fund is interesting, but not short-term priority. Still working on technical proposals on CDS market
  • Fitch: UK sovereign credit profile has deteriorated. UK needs stronger fiscal adjustment. Among larger AAA sovereigns, urgency greatest for UK, Spain and France
  • Fitch: UK still within tolerance of AAA rating, but uncomfortable with fiscal adjustment path set out by UK authorities
  • Fitch: Portugal’s gradual approach to fiscal consolidation to 2013 is a concern. Short-term outlook for Greece probably OK, longer-term outlook more open to question. Possible to have a sovereign default in the euro zone
  • Fitch: United States vulnerable to interest rate shocks
  • UK January global trade balance -7.987 bln, worse than median forecast -7.0 bln, biggest shortfall since August 2008

Risk aversion has picked up this morning, European stocks lower, oil off over a buck and gold lower. Fitch’s various prognostications (see above) hardly helped matters. USD and especially JPY the beneficiaries. JPY also aided by ongoing reports of fiscal year end repatriation flows.

EUR/USD started around 1.3615. Dipped early, briefly below 1.3600 before bouncing with reports circulating that Russia and BIS had been notable buyers. The recovery didn’t last long and sell orders tipped at 1.3640/50 never came into play. We were soon back below 1.3600, downbeat comments from Fitch Rating (see above) pressuring the pairing. We’ve been as low as 1.3562 so far, presently at 1.3570.

EUR/JPY is down at 121.75 from early 122.50.

Cable has had a bad day. Started around 1.5010 and was under pressure fairly quickly. Poor RICS housing data out overnight, Times poll showing Labour and Conservatives running neck and neck in key marginal seats and Moody’s warning of possible downgrades to UK banks/lenders among factors weighing.

The sell-off accelerated as comments from Fitch Rating hit the wires (see above) and as data came out showing UK’s trade picture worse than expected (see above) We’ve been as low as 1.4940 so far, talk of sovereign buying below 1.4950 lending some very tenuous support. We’re presently at 1.4952.

USD/JPY has seen a more active morning, down at 89.80 from early 90.30 amid heightened risk aversion and ongoing reports of fiscal year end repatriation flows. A US investment bank seen notable seller this morning. We’ve been as low as 89.63 so far, just above tipped buy orders at 89.50/60.