- Fitch downgrades outlook for Belgium’s AA+ rating
- Greek cabinet approves faster privatization pace
- Mexico to nominate CB chief to run IMF
- BOE’s Weale: Start raising rates now
- Portugal FinMin: Restructuring not on the agenda
- Bini-Smaghi: Rates too low for too long lead to moral hazard
- US 10 year notes yield tests support at 3.09%, bounces to close at 1.13%
- S&P 500 falls 1.2% to 1318
- Oil falls $2.70 to $97.41; gold rallies $8 to $1518
EUR/USD tested the 100-day moving average in London this morning and spent the bulk of the US session in rebound mode. Several dips to the 1.3985/90 area were snapped up, the last once at midday when Fitch downgraded its outlook on Belgium. Small stops above 1.4050 were triggered in early afternoon, extending EUR/USD’s gain to a full cent t 1.4068. News that the Greek cabinet has agreed to accelerate privatizations was a modest plus for the euro. We close the session around 1.4047.
USD/JPY was boosted in afternoon trade by covering of EUR/JPY shorts. Slightly firmer US yields helped as well, sending the buck to its highs at the close of 82.00.
GBP/USD traded on a weak note for much of the US session. Heavy covering of EUR/GBP shorts during the London afternoon was a big driver of prices. We close at 1.6118 with a New York range of 1.6087/1.6140.
EUR/CHF recovered back above the 1.2400 level in US trade after a sharp slide overnight. Risk aversion remains high but not as extreme as earlier in the session.
AUD/USD ends at the lower ends of its range, weighed down by a 3.5% slide in copper and generally soft commodities markets. We end at 1.0505 amid a 1.0481/1.0536 range.
