- Merch inflation comments support euro in Morning trade
- Canadian retail sales fall 0.2% in December
- Saudi oil minister: Saudi spare capacity more than enough to offset Libyan disruption; fair oil price $70-80
- S&P: Spain in danger of downgrade to AA rating
- Libya declares force majeure on oil exports
- Case Shiller 20-city home price index falls 2.4%
- Khadafy vows to stay and fight
- Richmond Fed index rises to 25 in February from 18 in January
- US Consumer confidence rises to 70.4 from 64.8
- BOE’s Tucker: Inflation a concern but BOE faces real dilemma as economy too weak for hike
- Merkel: Extension of Greek payments to EU may be part of comprehensive euro package
- US 10 year note drops 12.5 p to 3.46%
- Oil rises $7.37 to $93.57
- S&P 500 falls 2.1% to 1315
EUR/USD was in a great deal of demand in New York morning trade, grinding through central bank offers from the low 1.3670s until peaking at 1.3704. We swiftly fell back to 1.3635 on profit-taking, a bout of risk aversion as Khadafy made his loonie, defiant speech and S&P comments on Spanish debt before falling into a quiet afternoon consolidation between 1.3650/70.
USD/JPY was bid up early in the session with high oil prices hurting JPY as did credit concerns on the Moody’s comments of Japan’s credit rating overnight. USD/JPY slumped from later in the session as US yields dove and risk aversion picked up. AUD/JPY was particularly hard hit in today’s trade. 82.58/83.25 was the NY range. We end at 82.75.
GBP/USD was extremely volatile with liquidity quite constricted today with many traders stick close to the sidelines. 1.6102/1.6196 was the NY range.
CHF was in demand,as one would expect given its safe-haven status. USD/CHF slumped as low as 0.9362.
AUD was sold off on risk aversion with AUD/JPY bearing the brunt in afternoon trade. A perfect time to take some risk off as North Africa/Middle East remains extremely unsettled. While oil and gold were generally firmer, grains and copper were hard hit today, undermining AUD. It ends at 0.9985. The further we back away from 1.0150, the more it looks like we have topped. Uptrend support at 0.9970 was tested and held today.
