- Ifo July German business climate index 106.2, demonstrably stronger than median forecast of 101.6
- UK Q2 GDP +1.1% q/q, +1.6% y/y, far stronger than median forecasts +0.6%, +1.1% respectively
- Moody’s places Hungary’s BAA1 sovereign rating under review for possible downgrade
- Ten banks to fail European stress tests – Goldmans
- German banking group head Weber: Confident that German banks all in all will perform well
- German FinMin: Doesn’t expect that it will have to take any steps due to stress test results
- Several Spanish savings banks fail stress tests – El Pais newspaper
- Japan senior govt official: Yen levels seem too high
You don’t have to go to a theme park to enjoy the excitment of the roller coaster. Just settle down and try trading a little foreign exchange. Certainly been a bit of a ride again today. The star of the show undoubtedly sterling.
Cable up at 1.5440 from early 1.5285. Stops tripped through 1.5310 and 1.5350 on way to session high 1.5449. The pairing was already rallying when it got a turbo boost from the surprisingly strong Uk Q2 GDP data. Uk clearer bought aggressively just below 1.5400 maintaining the upside impetus.
Sub continent central bank sold above 1.5430 which put in a temporary top before another wave of buying took us to session highs. We sit presently at 1.5440.
EUR/USD started around 1.2885. Ralllied early back just above 1.2900 before sliding lower again on report that several Spanish savings banks have failed the stress tests. An Asian sovereign was seen selling aggressively on this move. News Moody’s had put Hungary’s sovereign debt under review for possible downgrade helped get us down to session low 1.2861.
Buy orders were well noted at 1.2850/60 and they proved a durable base. The pairing was already recovering when the release of much stronger than expected Ifo data sent the pairing into orbit. The UK GDP data then gave added impetus as general risk appetite got another fillip and we got all the way up to session high 1.2967. We’re presently back at 1.2945.
USD/JPY touch firmer, up at 87.20 from early 86.90. Large Japanese bank seen notable buyer below 87.00 today.
