- Weekly US jobless claims rise 1,000; better than expected; 4-wk moving average back to pre-Lehman levels
- US consumer loan delinquencies fall in Q3
- US holiday season sales better than forecast
- UK Prime Minister Brown: Growth strategy does not come at the expense of deficit reduction
- French FinMin Lagarde: Euro overvalued
- Fed warns banks to tighten interest rate risk management; guard against higher rates
- Fed’s Hoenig: Fed should hike sooner rather than later; Normal fed funds rate 3.5-4.5%.
- Oil falls $0.50 to 82.66; gold sheds $7 to $1132
- US 10 year note unchanged at 3.83%
- S&P 500 rises 0.4% to 1142′ highest in 15 months
EUR/USD fell to session lows right out of the gate as a host of factors including the Chinese rate hike and poor euro zone retail sales conspired to undermine the single currency. Heavy focus on the base of a bear-flag pattern on the daily charts at 1.4280 dominated the early part of the session amid reports that Goldman Sachs was a conspicuous buyer of 1.42 and 1.40 EUR/USD puts.
Prices steadied at 1.4300 but rallies were limited and the afternoon passed quietly with many awaiting tomorrow’s US employment report.
USD/JPY rallied sharply in early US trade, overcoming resistance at 93.30 and touching downtrend resistance at 93.40. The 200-day average at 93.49 seemed to be at risk, fleetingly, but a very large sell order (rumored at $1 bln) handled by a US investment bank quickly knocked USD/JPY back to 93.00. Heavy two-way action seen in the 93.15/35 area dominated the rest of the US session. US investors were buyers while leveraged accounts seemed to be the dominant sellers.
Cable found support at 1.5895/00 and traded quietly around 1.5930 for much of the US session.
AUD/USD was in wound-licking mode during US trade after the surprise Chinese rate hike overnight caught the market extremely long. It closed at 0.9175, not far from 0.9160 session lows. AUD/JPY is bolstered by Kan’s weak-yen comments overnight and closes above the key 85.30 level, ending at a new 85.60 high.
