• Swiss National Bank expects half-yearly loss of around CHF 4 bln. Sharp appreciation of the franc, in particular against the euro, resulted in exchange rate losses of over 14 bln francs
  • Japan govt keeps economic assessment unchanged in July report
  • BOJ dep gov Yamaguchi: Watching forex moves carefully
  • BOE minutes: Voted 7-1 in July meeting to keep rates at 0.5%, Sentance voted for 25 bps rise. Voted 8-0 for keeping QE at 200 bln
  • Euro stress tests asks banks to estimate tier 1 capital at end 2011 under two adverse scenarios – Document
  • China foreign ministry expresses “deep concern” over U.S., S.Korean military drills
  • Germany’s Merkel: Economic recovery is strong
  • Borrowing by Portuguese banks from ECB at record 40.2 bln in June – Bk of Portugal

Yesterday was crazy. This morning was crazier. If you’ve been trading cable this morning you’re probably in need of a nice lie down in a darkened room right about now. Or maybe a few stiff drinks would do the trick.

Cable rallied from an early 1.5270 to just above 1.5300 in orderly early trade. Then suddenly all hell broke lose and then some. We plummeted below 1.5200 in the blink of an eye (who knows where actual low was, I’ve heard any number of levels) and then rallied back above 1.5300, albeit not quite as quickly as the sell off.

I’ve heard any number of reasons given for the price action. The one I’ll go with (gotten from usually reliable source) is that it was caused by a Dutch bank and an algo machine whoopsie. Fat finger foul up mentioned as well, 3 mln sell interest morphing into 3 bln. Whatever it was, it was a cock up.

Anyways we’re presently at 1.5270, unchanged on the day. Middle East central bank seen selling decent amounts from 1.5320 helping cap rally at 1.5334. Same central bank was reportly seen selling down around 1.5300 as well.

EUR/GBP down at .8385 from early .8435. Australian bank reportedly notable seller of the cross today. Stops tripped through .8415 and more seen now around .8380.

EUR/USD down at 1.2810 from early 1.2880. Rallied early to 1.2913 session high. BIS is said to have sold around 1.2905 and a US bank, thought to be acting on behalf of real money clients, sold decent amounts at 1.2900/10. It was all downhill from there. Speculation had the BIS acting on behalf of the SNB.

Interesting to see the EUR/CHF cross fall sharply, presently at 1.3468 from early 1.3574. Half expected to hear rumours of BIS/SNB selling the cross

;)

, but didn’t. Can’t imagine they’d ever do that. Can you imagine?

USD/JPY sidelined, very marginally lower at 86.95 from early 87.10.

ps It’s been soooo crazy, I got my times muddled and done wrap hour early. whoops