- US Treasury delays release of semi-annual currency report until after G20
- Bernanke: Fed prepared to provide additional accommodation; inflation too low, unemployment to high.
- US CPI rises 0.1% in September, core unchanged
- US retail sales rise 0.7% in September
- Eurogroup’s Juncker: Too much volatility in main FX pairs , JPY not too strong
- EU’s Rehn: Discussing international policy coordination
- University of Michigan consumer sentiment falls to 67.9 from 68.2
- Dollar shorts trimmed slightly in IMM
- US 10-year notes rise 7 bp to 2.57%
- Gold falls $17 from intraday highs at $1385 to end at $1368, oil falls $1.25 to $81.41
- S&P 500 rises 0.2% to 1176
EUR/USD instantly surged to 1.4161 as Bernanke made the case for further monetary accommodation at the Boston Fed conference this morning. A second rally toward the highs was sold into by the BIS and prices quickly slide back through 1.4100. Comments on volatility being too high from Eurogroup head Juncker along with talk of a Plaza Accord-type agreement from the EU’s Rehn helped spark pre-weekend profit-taking as the morning wore on.
EUR/USD fell sharply at midday, falling back below the 1.4000 level, setting off loads of trailing stops. A rumor that China had been named a currency manipulator helped fuel risk aversion. There was loads of volatility as there was confusion over what time the currency report would be released and finally it was announced by the Treasury that they will not release the report until after the election and after the G20…
We ultimately fell below 1.3955, yesterday’s lows, to trigger yet more stops and to create an outside day key reversal off a trend high on the daily charts. Traders will look for follow0through sales on Monday.
AUD/USD reached parity on the Bernanke speech but spent less than a minute above that milepost. It too fell through Thursday lows to form an outside day on the charts ( a bearish engulfing, in candlestick terms) . It found support on pullbacks to 0.9860 and ends the week around 0.9900.
USD/JPY tested the 80.90 lows after Bernanke and rallied as high as 81.50 late in the day. A break of 81.68 resistance would signal a near-term bottom is in place for USD/JPY. Sellers still lurk on rebounds to 82.00, traders report.
USD/CAD recovered a good deal of lost ground today after a furtive probe below parity yesterday. We end the week at 1.01, having been as high as 1.0140 intraday. Profit-taking in commodities weighed on all the commodity currencies.
Cable blipped above 1.6100 after Bernanke and the US data which followed shortly there after but slipped back to end the week at 1 .5985. The fall in GBP/USD was buffered by a sharp pullback in the EUR/GBP cross to 0.8715 from 0.8790 highs early in NY.