• Fed renews central bank swap lines until August, 2011
  • Eurogroup’s Juncker: Euro not endangered; talk of its demise is “unscientific blabber”; euro zone bond idea has merit
  • Irish president signs bank bailout bill instead of sending to Supreme Court for review
  • Fitch becomes third ratings agency to put Greece on review for a downgrade
  • Spain passes 2011 budget
  • S&P 500 closes at highest level since Lehman collapse at 1255
  • US 10 year note closes at 3.31%, down 2 bp; copper closes at record high

EUR/USD tried to rally in early US trade but it failed in the low 1.3190s and soon fell back sharply. Multiple ratings reviews for European sovereign and bank debt downgrades weighed on the market again today as did fears that Ireland’s banking bailout law would be sent to the Supreme Court for review.

The Irish bill was instead signed but EUR/USD was only able to bounce marginally from session lows at 1.3073, closing now around 1.3098, the 200-day moving average. Solid demand was seen at the 1.3080 level on the way lower, traders reported.

Sovereign debt fears remain intense despite overnight comments from China that they support the EU crisis response. A fresh record low in EUR/CHF is the best evidence that the market remains very much on edge. We slipped as low as 1.2545 and close only 10 pips above those lows.

USD/JPY dipped to test bids from Japanese institutional investor Kampo at 83.50 before bouncing to 83.90 as EUR/USD plumbed its worst levels. Higher US yields (3.38% for a time) helped spur the bounce as well.)

GBP/USD was weighed down by horrible public borrowing figures this morning, a scandal-ette surrounding UK business secretary Vince Cable and broad USD strength all played a role. It dipped as low as 1.5437 before stabilizing to close at 1.5465.

Commodity currencies were mixed with the Loonie quiet steady and the AUD quite firm. Record high copper prices are helping underpin the OX, which orbits just below the 1.00 area, closing at 0.9970.