• S&P 500 closes at highest level in nearly 3 years
  • Bank of Italy’s Draghi endorsed by Sarkozy from ECB chief
  • US’s Geithner reiterates strong dollar in US interests; no policy to weaken dollar for trade advantage
  • BOE’s Sentance: BOE’s credibility at risk
  • ECB’s Gonzalez-Paramo: Greek debt restructuring would be worse than Lehman collapse
  • Case -Shiller home price index falls 3.3% in March versus year ago
  • US 10 year note yields fall 5.5 bp to 3.31% despite strong equity rally
  • Silvers falls $1 to %45.05
  • Gold ends marginally lower at $1501.50

A risk-on market was no respite for the dollar today as the market expects Bernanke to announce a go-slow policy on normalizing monetary policy at tomorrow’s inaugural press conference. An end to QE2 is expected to announced but quiet a period of low rates, perhaps more than six months is the present betting among the majority of traders/investors.

EUR/USD spent most of the US session in a 1.4600/50 range with one stray spike to 1.4658 during the NY lunch hour…We end the day at 1.4642 as the market looks paste ballooning credit restructuring risks in Greece which have led to wider spreads in Ireland, Portugal and most importantly Spain. 10-year spreads have widened 50 bp to 225 bp in the last between Spanish and German 10s.

USD/JPY experienced a post-fixing boomlet in which US custody banks drove prices from the 81.60s close to 92.00 resistance before buying relented. Prices slumped quickly from those highs and we end the day on the lows, dipping below 81.50 late in the US session. Stops remain in the 81.35 area, traders say.

AUD/USD jumped to 1.0792 before being capped by protection of 1.0800 barriers. AUD/JPY buying was a factor in the pop as the market embraced risk as US equities broke to fresh multi-year highs.We close at 1.075.

Cable recouped some early-session weakness ahead of tomorrow’s Q1 GDP report from the UK. Sentance talked tough on inflation, as usual. Cable stalled just below 1.6500 and ends at 1.6477.

USD/CHF fell to a fresh record low against the greenback today in London despite generally upbeat risk appetites. The last time EUR/USD was anywhere near present levels, EUR/CHF was exponentially higher… 0.8745 was the low. We end the day at 0.8758.