- Irish PM Cowen to call general election after budget process complete
- Chicago Fed National Activity index rises to -0.28 in November from -0.52 in October
- Portugal vows that it needs no aid
- PIGS sovereign CDS all wider
- EU’s Rehn: Euro near fundamental value; EUR the core “political project” of the EU
- ECB’s Trichet calls for strengthened budget rules; repeats appreciates US strong dollar policy
- ECB’s Stark: Crisis not over, taking on new form
- Rehn: EU crisis mechanism to be ready for discussion at Dec 16 summit
- S&P 500 reverses sharp losses, closes down 0.2% despite widening insider trading probe
- US 10-year note yields fall 7 bp to 2.80%
- Gold closes at session highs of $1366
Irish political chaos dominated much of the New York session as it was unclear for most of the day whether the government will survive to conclude the EU bailout or the 2011 budget. It looks as though it will, and will be dissolved early in the new year.
EUR/USD fell as low as 1.3577 on sharp long-liquidation as the strength in the euro that was seen late last week and early this week on the hoped-for EU package melted away as the Irish government was brought to the brink of collapse.
1.3635 and 1.3665 are resistance areas on rebounds near-term while 1.3575 and 1.3545 are support on dips. The BIS was a steady buyer of EUR/USD throughout the European session today but was unable to keep EUR/USD from sliding intraday.
USD/JPY continues to struggle to take out resistance in the 83.60s and slipped back to the 83.25 area in quiet US trade. US real money accounts were sellers during the US afternoon as US yields fell on risk aversion. When markets improved in the afternoon, USD/JPY was unable to bounce.
AUD/USD was belted early this afternoon by a US investment bank, following the eur/usd lower. We bounced sharply in the afternoon as stocks and gold recovered. We end at 0.9890.
Cable remains very difficult to call with EUR/GBP swings mostly offsetting any dollar-based trends. EUR/GBP was heavily in demand during the London session which dissipated as EUR/US dove after London went home. Cable closes at 1.5960.
