- US reverses Wednesday equity losses; rallies 2.6%; European shares close flat
- UK’s King: Inflation on target over the medium-term despite short-term volatility
- US pending home sales rise 6% in April ahead of expiring tax break
- Fitch raises outlook for US banking sector, now stable
- US’s Obama: Strong job growth expected Friday
- Spanish savings banks continue consolidation; four to merge, tap Bank of Spain bailout plan
- US auto sales rise strongly
- IMF sold 14.4 tones of gold in April
- Portugal approves austerity outline, tax hike
- US 2-year notes rise 5 bp in yield to 0.825%; 10- yr note yield up 6.5 bp to 3.34%
- Gold steady at $1225. oil gains $0.85 to 73.40
EUR/USD opened the US session under pressure, dipping to intraday lows of 1.2175 early in the day as North American traders heard the news that Iran has some portion of EUR 45 bln to go versus USD and gold as it shifts its reserves.
1.2185 had acted as support early int he day but the US sales saw lows of 1.2175 before a bounce. Rebounds were muted for much of the day despite a strong performance on Wall Street from relatively early in the session. We were capped in the 1.2215/25 area until about midday when share prices took off to the upside and EUR/USD eventually went with it. The rally reached 1.2265 before stalling. We consolidated between 1.2210 and 1.2250 for the balance of the session as stocks closed on their highs.
Japanese political turmoil combined with whetted risk appetites helped lift USD/JPY and EUR/JPY today in US trade. Model funds were solid buyers of both pairings. USD/JPY jumped as far as 92.35 while EUR/JPY triggered light stops above the 113.00 level, overcoming recent tops at 112.95 but only reached 113.08 before slipping back. 112.50/112.95 was the subsequent afternoon range, with EUR/JPY unable to maintain the pace set by the rally in the S&P.
Cable was far less in demand today as yesterday’s Pru/AIA demand dried up. We dipped to 1.4557 intraday before ending at 1.4650.
Commodity currencies were in demand today, boosted by the risk trade and on great risk appetite. CAD/JPY was very much in vogue as the BOC rate hike and Japanese PM search helped make a nice headline stew. AUD rebounded too, closing at 0.8405 , up from 0.8297 early in the session.
USD/CAD fell to 1.0380 from 1.0540 at the open. It closes at 1.0400.
