- NY Fed Empire State Manufacturing index falls to 19.1 in May from 39.1 in April; much weaker than expected
- US sees large in-bound capital flows in March; China net buyer of Treasuries for first time since September.
- Eurogroup’s Juncker: Not worried about EUR level, worried about speed of decline
- ECB bough EUR 16.5 bln in bonds last week, to sterilize tomorrow via 1 week depo
- SNB’s Hildebrand: Euro zone crisis causes risk for Switzerland that is out of its control
- FT: British Airways wins ruling forbidding strike this summer
- US equities close nearly unchanged after falling 1.8% near midday; DAX closes up 0.2%
- oil falls below $70 intraday, ends at $70.50; Gold closes on lows at 1220
EUR/USD traded in very choppy fashion in the US today, as did most of the financial markets. Stocks swung in a range of over 2%, rallying earlier in the day as EUR/USD squeezed as high at 1.2415 and slumping as low as 1.2280 as stocks slumped just after the European close. We ended toward the top of the range around 1.2390, as stocks recovered their losses to end slightly positive on the day.
Risk on/risk off was the theme of the day. Commodity currencies were sold heavily at various points today as the market frets over the potential for European contagion to send deflationary ripples through the global economy. AUD/USD fell as 0.8690 in early afternoon before rebounding later in the day to end at 0.8767. USD/CAD as high as 1.0424 during the Toronto session but eased to close at 1.0335.
Cable’s worst came in early London while the pound spent most of the session retracing in New York. Offers are eyed just above the 1.4500 level while bids are seen on dips now toward 1.4365.
The JPY pairs were highly risk-sensitive, as one would expect, swinging around along with the stock markets and the euro. When stocks and currencies went bid, USD/JPY and the JPY crosses did as well. We end at 92.50 in USD/JPY.
