- US retail sales disappoint; fall 0.4% in April, revised to -1.3% in March
- ECB’s Kranjec: ECB very likely to buy corporate bonds, commercial paper
- Germany’s Steinbrueck: Skeptical of EU stress test; may undermine recovery in sector
- German Chancellor Merkel: May see economic low-point soon, recovery not until 2010
- US business inventories fall 1% in March
- US oil inventories rise to highest in 80 years: API
- AIG: If economy holds up, taxpayers will not lose money says CEO
- BOJ Governor: Excessive FX volatility undesirable; Economy may bottom by end 2009
- French PM Fillon: Spending freeze in 2010
- ECB’s Weber: Greater risk of inflation than deflation despite inflation falls; exit strategy vital
- Oil closes below $58, down 0.90; gold reaches $930 before closing at $925
- US equities close 2.7 lower; S&P support at 875 eyed
It was a hectic day from the outset in the US and the market found EUR/USD already down about a cent from overnight highs, in the 1.3630s as NY walked in. EUR/USD fell as low as 1.3566 on growing risk aversion but maintained its perch above critical support at 1.3555/65. Large stops are arrayed just below that support in the 1.3540/50 region. Unless guarded by a central bank (perhaps buying back EUR/USD sold to protect 1.3750 barriers?), expect Asia to have a run at the stops early-on.
USD/JPY slumped in afternoon trade, breaking key support at 95.60 and triggering a fresh wave of stops. Japanese bids at 96.00 held the line for a time but they were filled in at the 15:00 GMT London fixing. The JPY strength extended to the crosses as EUR/JPY and AUD/JPY both lost significant ground.
Risk aversion weighed heavily on AUD, driving the pair nearly 2 cents lower on the day before it bottomed at 0.7510.
