- 3 killed as Athens bank firebombed
- Moody’s places Portugal on review for downgrade; downgrade likely
- ADP employment report: US adds 32,000 private sector jobs; as expected
- US Treasury refunding slightly smaller than expected as economy improves
- Non-manufacturing ISM steady at 55.4 in April; slightly weak
- IMF welcomes ECB suspending Greek debt rules
- Moody’s warns may downgrade Portuguese banks, local governments
- Pimco’s Gross: Greece to restructure debt over next 12-18 months; Portugal and Spain might too–CNBC
- Greek Finance Minister: Won’t back down from austerity
- French PM: Euro under speculative attack; attack will fail
- Finnish PM: Risk Greek package will not work, contagion will spread.
- S&P 500 closes down 0.66%, European Stoxx 50 index down 1%
- Oil closes below $80 for first time since late March; double top at $87
EUR/USD went into near freefall this morning in New York, tumbling from opening levels around 1.2940 to a low of 1.2803 in just over an hour. The death of three in an Athens bank as a result of a protester’s firebomb and news that Moody’s will likely cut Portugal’s credit rating sent the single currency skidding.
Prices rebounded to 1.2906 in late morning trade but prices revisited the lows during the afternoon as comments from European officials cast doubt over ability of Greece to meet its austerity targets.
USD/JPY held up very well in early US trade despite EUR weakness. The climb earlier in the day was stalled at 94.99 by Chinese protection of 95.00 barriers and dips were limited to 94.60 where China was spotted buying back dollars sold ahead of 95.00.
Price plunged to the 94.03 level in a blink on a large sell order executed by a UK bank, helping revive the risk-aversion role for the JPY against the dollar in addition to the crosses, which had already been pummeled. Prices broke below the 94.00 level in afternoon and retreated as low as 93.54 as EUR/JPY was forced briefly below 120.00 to trigger a barrier. We end at 93.80.
One factor that could support USD/JPY overnight is talk of large 94.00 expiries in USD/JPY at the 14:00 GMT New York cut.
EUR/GBP extended its fall to 0.8482 today as all the euro crosses were creamed. Cable fell back, but only marginally, ending the day at 1.5100. Tomorrow’s general election should keep liquidity low overnight.
AUD/USD extended its losses, reaching 0.9022 on sales from US real money accounts. Stabilizing gold prices helped moderate losses as the session wore on. Price rebounded to 0.9105 as risk aversion eased at midday but prices slumped again as jitters intensified in the afternoon.
USD/CAD reached 1.0355 on short-covering as oil prices extended their tumble today, ending below the $80. Crude looks like it has put in a major top and should pullback another $5 on a technical basis. USD/CAD ends at 1.0310.
Huge turnover in EUR/CHF again today, but the market was unmoved, as the SNB continues to take on all comers at the 1.4325 level in EUR/CHF.