- All France’s 12 oil refineries remain closed due to anti-pension reform strikes – Union official
- Air France CGT union calls workers to mobilise at airports nationwide on Wednesday
- ECB’s Nowotny: Euro is carrying main burden of drop in dollar and yuan
- Fed’s Evans: Much more accomodation is appropriate given high unemployment, low inflation
- IMF’s Lipsky: No clarity about whether US Federal Reserve will act on QE. “QE2 would depend on data.”
- China C.Bank advisor Xia says dollar faces long-term downward pressure
- Ex BOE’s Blanchflower: UK “desperately in danger of renewal slump”
Its been a very choppy start to the week’s trading. General pattern has been dollar strengthening early, extending Friday’s gains then selling off.
EUR/USD started around 1.3890 and fell sharply early. Traders noted interview ECB’s Trichet gave Italian newspaper La Stampa, which seemed to highlight sharp division within the ECB between the President and the Bundesbank head honcho Weber on matters of monetary policy.
There was also the little question of growing industrial unrest in France, which weighed on the euro. Stops were tripped through 1.3850 on way to session low 1.3832.
Then comments from Fed’s Evans (re monetary policy/QE) and Chinese central bank advisor Xia (about long-term USD weakness) hit the wires and the dollar started to lose ground.
Sovereign buying was noted in 1.3850/60 area, followed by US commercial bank buying aggressively driving the pairing toward 1.3900. Forex hedge fund out of Long Island then helped pairing back over 1.3900.
Comments from IMF’s Lipsky re Fed QE (see above) have however stymied the EUR/USD comeback. We’re presently at 1.3898, little changed on day.
USD/JPY at 81.26, all but unchanged on the day. We drifted off to session low 81.13 where buying from a sovereign name (not the BOJ) lent support.
Cable down at 1.5895 from early 1.5945. Reserve bank of India was seen buying early below 1.5900 (they sold above 1.6050 Friday) but didn’t stop the early slide getting as far 1.5838 after stops tripped through 1.5860. The pairing then rallied back as greenback gave up general ground.
EUR/GBP up at .8745 from early .8710. The market will have noted comments made by ex-BOE MPC member Blanchflower (see above)
Sell orders seen clustered .8755 upto .8770, stops through .8775.
USD/CAD up at 1,0205 from early 1.0170. Sovereign buying was noted in the pairing this morning.
