* US Personal Income flat in July, Consumption up 0.2% due to cash for clunkers
* Final Michigan Consumer confidence reading hits a 4 month low, Consumers’ Finance Assessments worst since the survey began in 1946.
After yesterday’s huge Dollar sell-off on the back of a $3bio Usd/Chf sell order, Eur/Usd started the North American session firmly on the front foot as US Equity markets rallied strongly. Eur/Usd hit the day’s high at 1.4388, before yo-yoing in a 1.4350-85 range. Alhough the Michigan Confidence data improved from the mid-month release, the fact that consumers assessment of their own finances were at the lowest level since the survey began in 1946 reminded investors that the consumer might not be quite ready to come to the party. Stocks trickled lower with Eur/Usd in step. A couple of attempts at piercing bids in the 1.4325/30 area came to nothing until almost at the same time as the pyrotechnics yesterday, Eur/Usd sank through the bids and made its way down to 1.4280. Only ten points away from where all the action had started yesterday.
Cable followed a pretty similar pattern to Eur/Usd, albeit a bit more violently, peaking above 1.6380 when the risk on trade was in full swing before plunging down to 1.6265 in less than an hour. A recovery back to 1.6345, was quickly followed by a Eur/Usd inspired sell off to our current 1.6280 level.
There was no great interest by traders in putting on any new positions in Usd/Jpy before the elections this weekend, but it mainly traded with an offered tone for most of the session ranging between 93.40 to 93.90.
All in all a pretty typical last week in August. Thanks to everyone for all their comments and help over the last week. The community that has built up here is fantastic, lets keep it going. You’ll have the tanned and relaxed Jamie back from his vacation next week. I hope you all have a nice weekend.
