- GBP weakness supports dollar in early US trade
- $81 bln in M&A deals announced today but Wall Street can’t rally
- HSBC put on Watch by Moody’s for downgrade
- Canadian housing starts fall to 134,600 annual rate
- Eurogroups Junkers: No sign of upturn in EZ economy
- EU’s Almunia: Too soon to assess impact of monetary, fiscal steps to boost economy. Recovery will take longer than expected
- Romania asks for EU bailout: Almunia
- US equities fall again,S&P down 1%
GBP/USD was hammered during European trade as fears of the UK financial sector falling almost entirely into government hands spread again today. Cable fell to 1.3743 before rebounding modestly. EUR/GBP soared to 0.9187 before dipping on profit-taking in the afternoon. Range 1.3743/1.3858
EUR/USD fell to 1.2554 in early US trade before turning higher at mid-morning. A rebound in US equities triggered a sharp short-squeeze in the pair, as did relentless demand for EUR/GBP. Buying from the BIS was seen in the 1.2560 area. EUR/USD reached 1.2660/65 in early afternoon before dipping to 1.2600 late in the day. Range 1.2554/1.2662.
USD/JPY rallied early as the surged across the board. Real-money selling above the 99.00 level helped knock the pair back below that level. Much of the afternoon was spent in the 98.80s. Range 98.65/99.20
USD/CAD broke key resistance in the 1.3000/20 region, jumping as high as 1.3063. A buy recommendation from Goldman Sachs combined with soft Canadian housing data a further catalyst, along with general risk aversion. Range 1.2925/1.3063
