- ADP employment report: Private sector loses 39,000 jobs; worse than expected
- IMF: Dollar slightly overvalued; EUR fairly valued; CNY undervalued
- IMF World Economic Outlook released
- Geithner: US has allies in push to get China to revalue; Japan not in same camp as China on currencies
- Canada’s Ivey PMI rises to 70.3 in September from 65.9 in August
- Canada: Currencies will be on G7/IMF agendas
- S&P 500 unchanged at 1160
- US 2-year note falls to 0.385% yield, 10-year note 2.40%, down 7 bp
EUR/USD extended its explosive rally today, overcoming a pair of milestones, the 61.8% retracement of the Fall 2009/Spring 2010 drop at 1.3894 and the 200-week moving average at 1.3922. We rallied as high as 1.3949 before slipping into a narrow (and bullish) consolidation near the highs.
USD/JPY fell to 82.75 immediately after the poor ADP data filling in very large bids from 83.00 to 82.80 and triggering stop-loss sell orders. USD real money accounts were steady USD/JPY buyers throughout the US session but rallies were limited to the 83.10 area.
Cable made a marginal new high for the trend at 1.5941 today but EUR/GBP buying made the pound a relative under-performer. Traders fear the BOE could lay the ground work for a fresh dose of quantitative ease at tomorrow’s MPC meeting.We close at 1.5883.
AUD/USD added to gains today but gains were relatively modest, peaking at 0.9791. Real money sellers were seen in AUD/USD. AUD was sold today versus the EUR and CAD today, traders reported.
USD/CAD accelerated losses today after posting the second strongest PMI in its history, prompting the market to shrug-off nagging fears that Canada’s economy will be dragged lower by its weak neighbor to the south.
EUR/JPY was dragged though downtrend resistance at 115.25 today by the strong EUR/USD and closes the session at 115.53.
EUR/GBP ends the day at new trend highs 0.8775. No move from the BOE tomorrow may prompt a knee-jerk rebound in the pound tomorrow morning. 0.8807 is important resistance.
