- US investment bank rumored buyer of 5 bln EUR/USD late in Europe, early NY PM
- ECB’s Bini-Smaghi: Recovery possible in 2010 but doubts remain
- ECB’s Ordonez- Big Spanish banks OK; small and medium-sized may need help
- Belgian business confidence rises to -23.6 from -27.6
- ECB’s Weber: No need for further policy steps; sees good demand at tomorrow’s ECB refi tender.
- US formally files WTO complaint against China
- Barclays raises US GDP forecast
- Obama declines comment on Bernanke reappointment; doing “fine job”. Says “not yet” on second stimulus package.
- South Korean PM: Wants dollar to maintain reserve currency role; will continue accumulating reserves.
- Business Roundtable: CEOs less pessimistic
- US 2-year note auction very strong; $40 bln sold at 1.15% yield
- Stocks closed mixed; S&P up 0.2%, Dow down 0.2%; 10-year note falls 5 bp to 2.64
- Oil rallies $1.76 to 69.26, Copper rebounds 2.7%
The market undid Monday’s dollar strength and then sent the greenback skidding. Rebounds wee capped initially around 1.4010/20 in New York, then there was a stall at 1.4038 and finally there was an eruption (led by a US investment bank) that took prices through the 1.4100 level before stalling. Rumors of a EUR 5 year buy order made the rounds. Whether or not it was that big is open to question, but the buying was substantial to be sure.
USD/JPY dipped to 94.88 at the peak of the frenzy but soon rebounded to 95.25. Comments from the Korean PM that they would continue to accumulate reserves helped underpin USD/JPY on the assumption that Japan will somehow manage to keep the JPY from strengthening dramatically while the economy remains soft. Very large bids are rumored down at 94.75, traders report.
Commodity currencies lagged the action today, not rallying as robustly as the Euro. USD/CAD closed at 1.15 and AUD/USD at 0.7940.
