- Greek FinMin: Need to trigger aid arose after deficit revision, Moody’s downgrade. Aid request removes uncertainty in markets over Greece’s funding. First tranche of money to be available before May 19
- German FinMin: Germany is ready, on basis of Greece facing last resort, to make our contribution
- Later more comments from German FinMin: Euro is stable currency and “we will defend it”
- U.S March durables orders -1.3%, much weaker than median forecast +0.3%. Durables ex transportation +2.8%, much stronger than median forecast +0.7%, biggest rise since December 2007
- UK opposition leader Cameron says danger of hung parliament leading to reduced confidence in UK
- Germany’s Merkel: It’s important that all EU governments ensure stability of euro
- US March single family home sales 411k, better than median forecast of 330k
- G20 communique will not endorse idea of global bank levy – G20 official
- EU’s Barroso: Portugal’s situation serious, but different from Greece for various reasons. Important that Portugal correct imbalances. Has conditions to face current problems
North America arrived to the news Greece had asked for activation of the EU/IMF aid facility, with EUR/USD around 1.3300. In early trade the pairing saw price action bouncing back and forth in a narrow range either side of 1.3300. Eventually though comment from the German Finance Minister that Germany was ready to contribute its part to Greek aid facility sparked accelerated euro gains.
Sell orders noted at 1.3350/60 were taken out and stops just above tripped on way to 1.3375 where a sovereign name stepped in selling. That capped things for awhile. Then in late trading the German Finance Minister came out with more comments, declaring the euro will be defended and that “we will win.” That little tirade helped EUR/USD hit a session high 1.3400 where it topped out, presently back at 1.3375. Talk China sold up at 1.3390/00.
USD/JPY rallied hard early amid reports of a Middle Eastern Monetary Authority buying aggressively. We went from around 93.50 to session high 94.32. Asian sovereign selling was reported around the highs and we finish back down at 94.05.
Cable ends up at 1.5375 from early 1.5355. The pairing came under pressure, not helped by comment from Tory Leader Cameron warning of damage a hung parliament could do to confidence in the UK. EUR/GBP also rallied strongly from around .8665 with hedge fund seen strong buyer and this also pressured cable.
Cable fell eventually to session low 1.5296 before real money buying helped spark a robust recovery. This rally extended on the coatails of the accelerated EUR/USD gains.