EUR/USD edged up on healthy risk appetites early in the session, reaching 1.3692 in morning trade but it was soon punched lower as ECB economist Stark all but ruled out the idea of a European Monetary Fund, saying it would violate the terms of EMU. Also hurting the EUR was a dose of scare-mongering by Greek PM Papandreou during his Washington trip, saying a broader crisis is likely if borrowing costs are not lowered fro Greece. EUR/USD slipped as low as 1.3605 before stabilizing. It traded quietly in the 1.3630s for the bulk of the US afternoon.

Cable slumped a few minutes before EUR/USD began its fall with now clear catalyst for the drop. The extent of the drop suggested it may have been a tranche of M&A selling, but that is a guess on my part. 1.5168 to 1.5030 was seen in about 90 minutes. Bounces were limited to the 1.5090 area.

USD/JPY ran into selling on strength from the BIS around the 90.40 area and later around 90.50 from exporters. Dips were shallow, however, with 90.22 the New York low.

AUD/USD fell on profit-taking around midday as the early “risk on”attitude proved to be short-lived. AUD/USD saw its 0.9033 highs shortly after the open on Wall Street and slipped as low as 0.9077. Ranges were lethargic during the afternoon 0.9090/0.9105 contained the bulk of the afternoon dealings.