- Bank of Canada holds rates steady at 1.0%.
- Irish parliament passes first in series of budget resolutions
- IMF’s Strauss Khan: Greece has to restore growth. Greek repayment extension must be done by both IMF and EU. In 2011 it will be difficult for Greece to achieve targets
- German Wiseman Franz: Joint European fiscal policy would be good for currency union, but unlikely for now
- ECB’s Constancio: No real substitute for US dollar in medium term
- UK’s NIESR estimates UK GDP grew 0.6% in 3 months to November
- TD in talks to buy Chrysler Financial
- Irish FinMin give Irish budget details
- EU’s Van Rompuy: If needed we will consider increasing size of EU financial stability facility
- Moody’s analyst: “We have long-term concerns about the US rating outlook and they haven’t been addressed
- Irish opposition party: Might have to have early budget next year if fiscal savings not being met
Dollar supported today by sharply higher US treasury yields. Obama tax cut extension has fixed income market worrying about increased price pressures and burgeoning budget deficit.
EUR/USD down at 1.3290 from early 1.3370. It certainly wasn’t all one-way traffic though, the pairing initially rallying to session high 1.3400 where it ran into a wall of sell interest. From there it was all downhill as US treasuries sold off. A UK clearer was a very notable early seller of EUR/USD, said to be acting on behalf of leveraged names.
USD/JPY finally couldn’t ignore the rising US yields and is up at 83.45 from early 82.65, having been as high as 83.54 at one stage.
Cable down at 1.5760 from early 1.5775, the pairing’s fall cushioned by strong selling of the EUR/GBP cross. The cross is presently down at .8430 from early .8475.
USD/CAD up at 1.0095 from early 1.0015. Pairing got early lift from dovish comments from the Bank of Canada. Talk of TD buying Chrysler Financial also lent support as the market salivated at thought of decent-sized M&A flows. And of course there were those US yields…….