- Talk Bank of Korea bought dollars around KRW 1,123 – Traders
- Japan judicial panel says ruling party’s Ozawa should be charged over funding scandal
- Spain Sept jobless rate rises +1.2%, by 48,102 to 4.018 mln
- Euro zone sentix index rises to 8.8 in October from 7.6 in September, stronger than median forecast of 8.0
- UK September construction PMI 53.8, up from 52.1 in August and much better than median forecast of 51.4
- Euro zone August producer prices +0.1% m/m, +3.6% y/y, in line with median forecasts
- UK Osborne: Govt will withdraw child benefit from higher taxpayers
- UK Osborne: Britain out of financial danger zone
- ECB’s Costa: Portuguese banks need alternative access to funding other than ECB
- Euro zone to tell China yuan is totally undervalued – Spokesman
- Irish Central Bank: Sees 2010 GDP +0.2%
Euro has given up ground this morning. EUR/USD down at 1.3695 from early 1.3760; EUR/JPY down at 114.05 from early 115.05 and EUR/CHF at 1.3320 from early 1.3450.
EUR/USD saw steady early trade, but came under accelerated pressure amid talk of China selling. Model funds were also said to be notable sellers. European stocks came under accelerated pressure as general risk aversion picked up which weighed on the pairing.
Stops were tripped through 1.3740 and we got to around 1.3716. BIS was seen buying around 1.3720 and this lent some support, but it proved only temporary. More stops were tripped through 1.3700 and we got as low as 1.3667. Talk of Asian buy interest (probably including Asian central bank interest) surfaced around the lows and we’ve seen some recovery.
USD/JPY has given ground, down at 83.20 from early 83.60. US treasury yields are lower, helping pressure the pairing. No sign of the BOJ as yet. Japanese exporter sell orders seen beginning up around 83.90/00.
Hedge funds continue to buy, lending much-needed support.
Cable sits at 1.5830, marginally firmer from early 1.5815. Decent selling of the EUR/GBP cross, down at .8652 from early .8700, has helped lend cable support. UK construction PMI also came in as a nice surprise (see above) which will have helped sterling’s cause.
