- UK budget well received by ratings agencies; creates bank levy, raises VAT, capital gains tax, Cuts spending
- Germany and France propose similar bank levies to UK
- US existing home sales fall 2.2% in May
- Richmond Fed survey dips to 23 in June from 26 in May; much stronger than Philly…
- BOC’s Lane: Strong CAD will drag on Canadian economy; will figure in monetary policy and economic decision-making
- US judge overturns Obama’s six-month deep water drilling moratorium; crude falls.
- S&P 500 falls 1.6%, closes below 1100, US bond yields end lower; 2-year note falls to 0.68% from 0.725%, 10-year note at 3.16% from 3.24% Monday
EUR/USD shared the spotlight with the pound and Swiss franc today. The pound was supported by a credible austerity budget (according to the ratings agencies), helping boost the pound from 1.4689 lows at the begging of the speech to 1.4859 highs by mid-afternoon. EUR/GBP fell below 0.8300, ending the day at 0.8285.
The franc rose to a record high versus the euro today after SNB’s Jordan explicitly called an end to forex intervention overnight. It fell as low as 1.3586 during the New York afternoon.
EUR/USD dipped to 1.2250 but maintained support at the 1.2240 level despite weak US housing data which helped erode equity prices. A short-covering rally late in Europe saw EUR pop to 1.2318 before falling back to the 1.2260s in the afternoon. Stops lie below 1.2240 and may prove attractive to snipers in early Asia.
USD/CD rallied today as crude prices fell o the overturning of the drilling moratorium and on comments from BOC’s Lane about the strong CAD slowing the economy. AUD slipped back to end the day on its low at 0.8716 as risk aversion returned late in the day.
