- No deal on FX rates likely at G20 this weekend
- Japan’s Noda: G7 meeting tomorrow ahead of G20
- Fannie/Freddie could need hundreds of billions in further US aid
- China: Develop your own rare earth resources
- US jobless claims drop to 452,000 from revised 475,000 last week
- Philly fed survey rises to +1.0 from -0.7; slightly weaker than expected
- Anglo Irish Bank offers junior debt holders 20 cents on the euro
- ECB’s Noyer: Fed not devaluing dollar, euro overvaluation an oversimplification
- Fed’s Bullard: No decision on QE until FOMC meeting; if necessary could buy $100 bln per meeting
- Gold falls sharply; triggers large stops below $1330. Reaches $1318. Closes at $1325
- S&P 500 rises 0.2%; rose 1.1% intraday to fresh high
- US yields rise 6 bp to 2.54% ahead of $99 in fresh Treasury supply next week
Another extremely volatile session today. EUR/USD reached 1.4038 in New York this morning after a US think-tank downplayed any chance of a grand bargain on exchange rates to come from the G20 meeting in Seoul next month. We were unable to hold those gains amid talk of Chinese and Mid-East selling and soon fell back below 1.4000.
One source of EUR demand for euro is believed to have dried up today as rumors swirled that EUR 5 bln was bought as part on an M&A deal over the last two sessions.
EUR/USD profit-taking after Anglo-Irish announced an offer to junior debt holders which included an 80% haircut in exchange for new debt. Comments from Noyer that the Fed is not purposely pushing down the dollar also helped weigh on the euro which dipped as low as 1.3904 in afternoon trade. We bounced mildly as Bullard said QE could come in $100 bln clips but end the day at 1.3920.
Cable could not catch a break today. It slid this morning as EUR/GBP rallied as high as 0.8908 and could not bounce as the dollar recovered during the afternoon.The pound closes at 1.5695, robbing Gerry of purchasing power by the day. He arrives on US shores a week from tomorrow so expect a massive downdraft in cable over the next week with a rebound as soon as he heads back the following week…
Gold weakness was a big contributor to dollar strength this afternoon as profit-taking accelerated in the metal. That helped stall an equity rally and underpinned the dollar generally.
AUD/USD traded with a soft tone as a result, down to 0.9745 from 0.9890 late in London. There was some talk of a short-dated 0.96/99 DNT in the market today though we were unable to confirm the structure in fact exists.
USD/JPY edged a shade higher in recent ranges with traders growing very bored with the pair. Somewhat firmer US yields gave the dollar a bit in quiet afternoon markets, up to the 81.35 area. A move above 82.00 is needed to brighten the near-term outlook.
