- US durable goods orders fall 2.4% in August, weaker than expected
- University of Michigan consumer sentiment index rises to 73.5; highest since Jan 2008
- New home sales rise 0.7%, weaker than forecast
- Chinese president Hu: Retain stimulus but address imbalances
- Fed’s Warsh: Policy shift could come sooner than expected, be more aggressive than in past; later soften remarks, said not signaling imminent shift
- UK Chancellor Darling: No government policy to weaken pound
- G20 discussed Tobin Tax but is not part of communique; IMF to study
- Short dollar futures positions reached new 18 month high this week: CFTC
- Gold slides as low as $986, ends at $985.50
- S&P closes down 0.6% at 1044
The dollar played second fiddle to the pound again today despite focus on Fed comments, Iran’s expanding nuclear program and the G20 confab in Pittsburgh. The pounds weakness added to yen strength today as GBP/JPY liquidation was a major feature.
Comments from former MOF official Sakakibara during the London morning helped send USD/JPY below 90.00 and prices later slid as low as 89.52 as Japanese retail investors were stopped out of all manner of JPY crosses. The Sakakibara comments intensified earlier remarks by Japanese FM Fujii that he does not favor forex intervention.USD/JPY ends at 89.80 and cable at 1.5930.
EUR/USD fell to 1.4622 during the New York morning after being capped several times at 1.4720. Early focus on the Warsh comments, plus big drops in gold helped fuel dollar buying. A subsequent bounce reached 1.4724 before prices turned lower again. We spent musch of the afternoon in the 1.4660/80 area.
Commodity currencies were roiled by JPY cross liquidation but ended in the middle of their ranges. AUD ended at 0.8650 and Kiwi at 0.7175.
