- US new home sales fall 0.7% in July; 298,000 annual unit rate
- Richmond Fed composite index falls to -10 in August from -1 in July
- FDIC quarterly report shows improved bank profits, fewer troubled banks; first drop since 2006
- Greek collateral remains hot topic; Finland still presses for security
- Greenspan: The euro is breaking down; Europe hurting US earnings; gold not in a bubble; euro break up a possibility
- Finland threatens to drop out of Greek bailout unless granted collateral
- Eurozone consumer confidence falls to -16.6 in August from revised -11.2
- Germany’s Merkel: No special treatment for Finland
- Magnitude 5.9 earthquake strikes near Richmond, Virginia; felt in Washington and NYC
- US equities stage short-covering rally; S&P rises 3.4%
- US 10-year note rises 3.8 bp on move from bonds to stocks; yield 2.15%
- Gold falls $85 to $1525 as money moves from safe-havens back into equities
Euro dollar began like a carbon copy of yesterday’s price action as an overnight rally faded from the outset. Banking concerns were a big factor in prompting a bout of risk-off, as were comments from former Fed chair Greenspan highlighting the risk of a euro break-up. We fell from 1.4490 to 1.4375 before a heavy short-covering rally in the US equity market helped improve risk appetites. This helped lift EUR/USD into the low 1.44440s late in the session.
AUD/USD and CAD rallied nicely on the uptick in risk appetite while the safe-haven CHF and JPY edged lower.
AUD/USD ends at 0.1525 off of 1.0443 session lows; USD/CHF at 0.7925 from 0.7870 lows straight out of the gate. USD/JPY reached 76.72 in early afternoon after a morning dip to 76.47.
