- Bernanke: Technological innovation, flexible economy should produce strong upturn not that far in the future, AIG exploited gaps in regulatory framework, labor market has worsened in recent weeks
- Geithner: Bank bailout may cost more than $700 bln
- Fed’s Lockhart: Downside risks to the economy substantial; not out of the woods regarding financial stability.
- Bank of Canada cuts rates 50 bp to 0.50%; exploring quantitative ease
- US pending home sales fall 7.7% in January
- BOE to get go ahead for quantitative ease on Thursday; Reuters
- Obama: Stocks a good buy if you have long-term view
- Trichet: Refuses comment on “absurd” suggestion any country could leave eurozone
- BOA downgraded to A from A+ by Standard and Poors
- US automakers post awful sales: GM down 52%, Ford, 46%, Chrysler 41%
- S&P 500 falls 0.65%, closes below 700 for first time since 1996
EUR/USD rallied early in the US session, reaching 1.2652 before heavy selling via a Benelux bank caught the market long and pushed EUR/USD aggressively lower. Prices fell all the way back to 1.2522 level before stabilizing. Barrier options at 1.2500 remain a hurdle near-term. EUR/USD rebounded to 1.2595 before stalling. New York range: 1.2522/1.2652
USD/JPY worked higher during the US morning, garner strength from a modest recession in risk aversion and on reports of a fresh Japanese political scandal. Not only is is the majority is disarray in Japan, now the opposition is in hot water as well. New York range 97.58/98.58.
USD/CAD approached 1.3000 after the BOC cut rates 50 basis points to just 0.5% and announced it is exploring adopting quantitative ease. Strong offers are seen from 1.2980 through 1.3025, dealers report. Range 1.2823/1.2974
