- BOE’s Posen: US banking system could face negative surprises; banks may be too big
- BOE’s Bean: Economy has troughed; worst risks have not materialized
- EU’s Almunia: Don’t even want to think about Latvian devaluation
- Canadian new house price index rises 0.1% in August
- Iran: Trades oil in EUR and other currencies
- Rio Tinto: China copper imports slowing
- IBD-TIPP economic optimism dips to 48.7 in October from 52.5 in September
- US Commerce Secretary; Concerned by weak dollar, but notes it helps exports- CNBC
- ECB’s Noyer: Unemployment to rise in coming months, cut house-hold consumption
- Noyer: “More balanced” currency system a good idea; EUR could be a part; SDP won’t work as reserve currency
- Fed’s Kohn very dovish; no V-shaped recovery; growth and inflation to stay below target for quite some time
- Canadian PM Harper: Concerned about strong CAD
- S&P 500 dips 3 points to 1073; US 10-year not falls 6 bp in yield to 3.32%
- Gold reaches new intraday high of $1068 at midday in London; oil stalls just shy of $75.00 at $74.47. Copper falls 2.65% on Rio China comments
The US session opened with the dollar on its lows. EUR/USD rallied as high as 1.4876 after breaking through resistance at 1.4815/20, 1.4842 and 1.4866. Heavy buying by Asian central banks (including talk of buying by China in an area where we would have expected to see them sell) helped boost the EUR to new highs.
Price pulled back sharply, however, with several waves of EUR/GBP selling seen throughout the morning. A large German bank lead the selling, taking the cross down nearly a cent from 0.9412 highs.
Markets were particularly order-driven today. A single large USD/JPY buy order was able to boost the buck from 89.65 to 90.08 during the US afternoon before prices retraced the whole move.
EUR/USD found support at 1.4800 repeatedly and ends the session in the middle of the days range, around 1.4835. Technically, traders would rather have seen a close above the 1.4866 level to remove any ambiguity.
Same story in the dollar index. DXY fell to 75.92 today but quickly rebounded back above the 76.00 level that we’ve been keying off for such a ;ong time.
AUD slipped intraday as low as 0.9030 with several waves of proft-taking seen as well as the Rio Tinto comments on slowing Chinese copper imports spooking those heavily invested in the reflation trade.
USD/CAD rebounded from low of 1.0268 early in Toronto trade to end at 1.0350. The buck got a modest boost from jawboning from Canada’s PM, Mr. Harper.
Late in the session, Intel reported very strong earnings. This could set up an equity rally overnight which in turn could weigh on the dollar.