- Impending forced auto-maker bankruptcies spark jitters government may take more heavy-handed approach with banks
- Stocks slide amid return of risk aversion
- Oil breaks important support between $50.00 and 50.50, falls to $48.50, down 7.5%
- Commodity currencies give ground; AUD, below 0.68, USD/CAD above 1.26
- Trichet does not rule out buying corporate bonds; wait and see. Weak growth rest of year
- S&P cuts Ireland’s sovereign debt rating to AA+; outlook remains negative
- Spanish PM says deficits of 8% of GDP okay through 2011.
- French President’s office; Currencies will not be discussed at G-20
- Barclays rejects joining government asset protection scheme
- WSJ: US government looking to force GM, Chrysler into bankruptcy
- US shares close down 3.5%
EUR/USD extended losses from both the Asian and European sessions, building on European banking fears with renewed fears that the US may have to pour more money into the banks and will take a more activist approach in managing them. EUR/USD fell to the 1.3110/15 level but found support from the 100-day moving average at 1.3117 and talk of protection of 1.3100 barriers. A big macro fund is said to have turned a medium-term dollar short today. Short-covering was seen late in the session toward 1.3200. Small stops are eyed above 1.3210.The US range: 1.3111/1.3208
USD/JPY was surprisingly well bid today despite resumed risk aversion and the approach of the end of the Japanese fiscal year tomorrow. Prices reached 97.52. Stops lie in the 97.55/65 region, dealers report. New York range 96.78/97.52
The pound strengthened as EUR was weak across the board today. Hope the euro will avoid quantitative ease are fading. EUR/GBP traded 0.9752/0.9305
Commodity currencies were weak all day as oil broke back below the $50 level and the reflation trade suffered a very serious blow. 0.6768/0.6819 was ther US range for AUD/USD. 1.2475/1.2648 was the USD/CAD range.
