- US housing starts rise 15% in January; much better than expected
- US PPI rises 0.8% in January, core up 0.5%
- Belgian GDP rises 1.8% y/y in Q4
- US industrial production slips 0.1% in January,weaker than expected on poor weather; first fall in 18 months
- Merkel holds out hope for a German ECB candidate
- SNB’s Hildebrand: Excess liquidity will have to be absorbed eventually
- Israeli Foreign minister warns Iranian warships moving through Suez Canal to Syria would be viewed as a provocation
- Fed raises outlook for US economy, though unemployment to fall slowly; sees growth between 3.4 and 3.9% this year
- US 10-year notes rise 1.5 bp, close at 3.62%
- S&P rises 0.6%, highest since mid-2008
- Oil rises on Iran news, rise 0.8% tp $85.00. CRB rises 0.6%
A very choppy US session with the dollar reversing early strength to end closer to the lows of the day.
EUR/USD fell close to recent lows at 1.3460 this morning but buying by the BIS helped carve out a low and protect stops below the 1.3450 level. Short-covering took us quickly above 1.3500 at mid-morning before Iran warship story spooked traders and prompted a rash of position adjustment across the board. EUR/USD rallied as high as 1.3589 in panicky trade.
USD/JPY rallied as high as 83.98 after strong US data early but was unable to take out corporate and options-related offers at 84.00 and above. At one point, there were 750 mln dollars on offer between 84.00 and 84.03 on the EBS platform alone.The Iranian gunboat story sent bulls to the sidelines and USD/JPY slumped as low as 83.49. Japanese bids are seen at 83.40, we hear. We close at 83.65.
GBP slipped as Governor King damped-down expectations that the BOE is girding for a rate hike. We slipped as low as 1.5988 in early NY trade before recovering. Cable zoomed in thin afternoon markets, reaching 1.6110 before quickly slipping back to 1.6090.
CHF was heavily in demand. The geopolitcal jitters plus some mildly hawkish talk from the SNB were catalysts. We slumped to 0.9550 and end the day at 0.9595. EUR/CHF fell to 1.2975; ends at 1.3015.
AUD/USD rocketed late int he NY session from around 0.9990 to 1.0055 on buying from a UK clearing bank. Our readers speculated that the buying could be linked to insurance settlements to pay for the various natural disasters that have befallen Australia in recent months.
USD/CAD fell through 0.9850 to trigger a barrier.
