- Irish opposition finance spokesman Noonan: Hearing of policy difference between IMF and Europe (comment put initial sharp pressure on EUR/USD and it never recovered)
- Moody’s says EU/IMF package will increase the Irish sovereign debt burden, a credit negative for Ireland. Multi-notch downgrade, leaving Ireland’s rating still within investment grade category, now most likely outcome (more pressure for EUR/USD)
- Irish junior govt party leader (Green Party) says believes it is time to set a date for general election in 2nd half of January 2011. People feel misled and betrayed (EUR/USD hit again)
- Irish FinMin: Ireland is not bust, has substantial cash reserves. No divergence of opinion between IMF and EU
- German govt spokesman: We demand a stringent programme of reforms in Ireland
- ECB’s Nowotny: Important to contain Ireland problems. There are problems with individual states, not the euro (?)
- Japan vice FinMin Sakurai: To take firm steps on yen rise as needed in collaboration with BOJ – Kyodo
EUR/USD sits at 1.3670, down sharply from early 1.3755. Inbetween though we got as high as 1.3786 in an early rally as the market absorbed the weekend news that an Irish aid package would be forthcoming. Comments from the Irish oppostion finance spokesman then started the rot and it’s been downhill eversince.
BIS helped accelerate the decline selling in the 1.3740/45 region, and as periphery stockmarkets came under accelerated pressure so EUR/USD headed south. Moodys’ warning of multi-notch downgrades for Irish sovereign debt saw us through 1.3700.
Finally the Irish Green party ( junior partner in govt) calling for an early general election was the coup de grace.
Cable down at 1.5975 from early 1.6015. Inbetween though we got as high as 1.6084. Reports had sell orders lined up at 1.6085/95 and they provided durable barrier to topside. Model funds having been noted buyers early were seen flipping their positions and becoming notable sellers.
EUR/GBP down at .8555 from early .8590, but buying from large US commercial bank in .8545/50 area has lent some tenuous support so far.
USD/JPY sits at 83.50 hardly budged from early 83.45.