Analysts will be busy poring over the details of the proposed plan to see what it means in terms of a possible US debt downgrade. The market is happy to cover some partial USD shorts, especially against the JPY, but is still wary of going long USD as long as the threat of a downgrade remains real.
EUR/USD has been remarkably stable today, still trading near its NY closing level at 1.4390. The European situation hasn’t magically improved over the weekend and it is being buffeted by conflicting flows; EUR buyers against the CHF and JPY, and EUR sellers against the USD.
