- US personal income up 0.4%, spending up 0.5% in November; Savings rate steady at 4.7%
- University of Michigan consumer sentiment survey dips to 72.5 in December from preliminary 73.4
- US new homes sales tumble 11.3%
- oil prices extend rebound as US inventories fall; crude adds to $2 to $76.47
- US 10 year notes edge up to 3.75%
- S&P closes on Fibo resistance at 1120
EUR/USD accelerated gains this morning, snapping a downtrend in place since the US employment report on December 3 as US new home sales unexpectedly fell 11.3. Stops were triggered above the 1.4300 level and prices reached 1.4366 in early afternoon afternoon. A big back-up in European bond yields helped close the dollar positive interest rate differential between US and European rates by 10 bp, falling from 50 bp yesterday to 40 today.
Heavy buying of EUR/GBP in thin markets helped spur EUR/USD gains as well. Concerns from the Bank of England that money supply growth is not fast enough helped raise fears the BOE will take fresh action to reflate the UK economy. Stops above 0.8960 were triggered and EUR/GBP rose to 0.8999 before stalling.
USD/JPY dipped to 91.30 after stalling several times at 91.87 this week but rebounded late as US yields edge higher late in the afternoon. We close at 91.65.
Commodities currencies enjoyed a bounce today, helped by the CRB index which added 1.6%. 87.33/88.18 was the US range with a close at 87.98 in AUD/USD.