- IMF’s Strauss Kahn asked when China should let yuan appreciate, replies “sooner the better”
- EU Almunia: China accepts must rebalance economy and that some fx appreciation necessary
- Chinese Vice Foreign Minister: Yuan has aided global economic recovery from crisis. It should be clear to all what China’s yuan policy is
- Obama: Pleased to note the Chinese commitment, made in past statements, to move toward a more “market-orientated exchange rate over time.”
- UK October CPI +0.2% m/m, +1.5% y/y, little stronger than expected. ONS says largest upward effect on CPI from transport, particularly fuels, used cars, airfares
- ECB’s Trichet: Important that U.S. authorites confirm that strong dollar is in U.S. interest. He agrees that it is in their interest – Le Monde interview
- ECB’s Trichet: Some European countries already very close to losing fiscal budget credibility
- Swiss September retail sales -1.6% y/y
- SNB’s Roth: 2010 will be difficult year for Switzerland
The USD is generally firmer this morning (USD/JPY exception, being unchanged). Risk appetite is a little dulled today, European stocks off marginally while oil is off about 1/2 a buck.
It seems to me the market has gotten a little tired of the yuan debate. Suffice it to say doesn’t look like the Chinese will be revaluing anytime soon.
EUR/USD is lower, presently down at 1.4905 from an early 1.4965. The euro bulls never looked like wanting to take on touted sell orders up at 1.4995-1.5010, an ACB having reportedly capped the topside at 1.4999 overnight.
We stood around 1.4940 when comments from a Trichet interview in Le Monde hit the wires. His comment about some European countries being very close to losing fiscal budget credibility certainly seemed to strike a nerve. EUR/USD slumped to a session low 1.4894 before steadying. UK clearer and Swiss private bank among notable sellers this morning.
Cable has had a wild ride this morning., finishing the morning down at 1.6785 from early 1.6830. Twice cable tried to get through sell orders up at 1.6860/80 and twice it failed, topping out at 1.6874.
Cable had already tried once and failed to get through said 60/80 offers and was sitting back around 1.6830/35 on the release of slightly stronger than expected CPI data. With the help of strong buying from a US investment bank cable rallied strongly post release making it to 1.6872.
The pairing was already on the defensive when Trichet’s comments hit the wires. His comment regarding countries losing fiscal budget credibility will certainly have resonated with sterling bears, who had been having a tough time of things lately, and they grabbed the opportunity with relish, cable falling sharply. In the time it’s taken me to write this wrap, cable has fallen a further 15 points, presently at 1.6770.
USD/JPY sits at 89.10, effectively unchanged on the day. In early European trade the pairing fell quickly before running into well-touted decent buy interest at 88.70/80 and recovering.
AUD/USD lower on diminishing risk appetite, presently down at .9280 from an early .9340.