The JPY and USD have firmed marginally in Asian trade, EUR/USD down at 1.3460 from a North American close Friday around 1.3490, while EUR/JPY is down at 127.80 from around 128.30. The moves come amidst heightened risk aversion, with Asian stocks posting across the board losses.
The FT reports that small and medium-sized US banks would need to raise as much as $24 bln in additional capital to meet the requirments of the stress tests given to the 19 largest banks.
The investment bank Sandler O’Neill, who carried out the research for the FT, feels as many as 500 smaller U.S. banks may be forced to close.
Elsewhere in The Times, Anatole Kaletsky has written a very downbeat piece on Europe entitled “Europe waits for Germany to come to the rescue”, which gives much food for thought.
An Asian central bank was seen buying EUR/USD overnight at 1.3425/30, and this has so far helped lend tenuous support.
