- Bank of Canada raises rates 0.25% t0 1%; outlook unusually uncertain
- Irish government to break up and wind down Anglo Irish bank; price tag will not be known until October
- ECB’s Stark: German banks under-capitalized
- ECB’s Weber: Basel III deal expected this weekend; will not hurt growth or bank lending
- NIESR says UK GDP growth decelerating
- Fed’s Beige Book: Economy growing but clear signs of deceleration
- US consumer credit falls $3.6 bln in July; sixth straight monthly fall
- S&P 500 stalls at 100-day moving average again, closes at 1099, up 0.6%
- US 10-year note yield rises 5 bp to 2.65%
USD/JPY was in the spotlight early, rising in London on talk of BOJ rate-checking and on talk during the New York morning that Japanese banks had been warned to prepare for intervention on Thursday. USD/JPY rallied as high as 84.05 on short-covering but was unable to hold gains above 84.00. Quiet range trade prevailed around 83.90 for most of the afternoon.
EUR/USD rose with risk appetites this morning and on rallies in EUR/JPY after the BOJ talk and EUR/CHF after a fierce short-covering rally in that pair intraday. China (and others) were rumored sellers above the 1.2740 level. The rally reached 1.2765 but prices slipped back during the afternoon hours with the lack of a price-tag for the roll-up of Anglo Irish Bank a euro negative. EUR/USD closes at 1.2717.
AUD/USD rallied to 0.9194 as risk appetites revived in morning trade put protection of 0.9200 barriers is said to have stalled the advance. China earlier bought dips to the 0.9140 area. We close at 0.9172.
USD/CAD fell after the BOC hikes rates to 1%, a move many see as the last one of 2010. CAD/JPY was in big demand while EUR/CAD was sold on the news. USD/CAD slumped as low as 1.0346 from 1.0485 before the announcement.
Cable rallied during the US morning, retaking 1.5500 as the market continues to whip itself silly one day to the next. News that NIESR sees slower GDP growth helped send cable back to the 1.5460s in afternoon trade. 1.5533 was the intraday high.
