- Case-Shiller house price index rises 1.6% in July, falls 13.3 y/y; firmer than expected
- US consumer confidence dips to 53.1 from 54.5 in August. Lower than 57.0 forecast
- UK’s Brown: To make deficit reduction of 50% in 4 years a law
- Fed’s Fisher: When Fed reverses policy could be equal in speed and intensity to last easing cycle; must see upturn in bank lending to know recovery underway
- Central bank buyers noted on dips in EUR/USD, near 1.4525
- Business Roundtable CEO survey; sluggish hiring and capex
- S&P falls 0.2%; Gold little changed at $992.75, oil down 0.25 at $66.60
EUR/GBP was in freefall in early US trade as BOE Governor King completely shifted gears and and ruled out further QE in the near-term nor a cut in the deposit rate. Hawkish comments from Dallas Fed President Fisher undermined EUR/USD further as he echoed comments made last week by Governor Warsh that rates could go up as fast as they came down. EUR/USD fell to 1.4525 where it was met with buying by the BIS. Bounces were seen to the low 1.4780s in afternoon trade, partly as a result of Fisher tempering his comments by saying it could be some time before the Fed can contemplate tightening.
GBP/USD was underpinned by King’s rhetorical reversal and spent the afternoon consolidating big gains. It held below 1.6000, where a mix of stops and offers are noted. EUR/GBP fell a cent to 0.9105 and closed at 0.9135.
USD/JPY rebounded above 90.00, reaching the 90.39 level. A US investment bank smacked it from the highs but US real money accounts bought dips and fostered a consolidating in the 90.20 area in afternoon trade.
AUD/USD stalled in the 0.8760s in London before sliding back to 0.8680 on the hawkish Fed comments before popping to 0.8730 in the afternoon. Prices eased late in the session after a strong earthquake near Samoa prompted tsunami warnings in the region.We close just above 0.87.
