- US PPI rises 1.8% in November, core rate up 0.5%; much firmer than expected
- Empire State Manufacturing index falls to 2.5 in December from 23.1 in November
- US TIC data shows moderate outflow in October after massive September inflows
- US industrial production firms 0.8% in November, Capacity use rises
- Austrian banks in the spotlight; CEO says no bailout needed, would welcome partner
- Ifo’s Sinn: Greece could be Europe’s Lehman
- German labor union Verdi seeks 5% wage increase for 2010
- ECB’s Wellink: Policy to return to normal in 2010; non-standard measures to be withdrawn gradually
- Greek FinMin: Not looking for EU bailout
- Bernanke written response to Bunning: Slack in economy will keep inflation in check
- Oil rebounds $1.27 to 70.78; Gold bounces to $1123 from $1112 lows
- S&P 500 closes down 0.5%; US 10-year note edges higher in yield to 3.60%
The euro took it on the chin today as US corporates rushed into the market to hedge year-end requirements, abandoning the idea that the greenback will continue to fall endlessly. Continued concern that Greece will not sufficiently cut its deficits to maintain its credit rating, fears of a spreading Austrian banking crisis and on-going concerns that Dubai has merely put a band-aid on a still bleeding wound helped underpin the dollar. Strong Industrial production data as well as hot PPI data, which raised, the specter of an earlier than expected hike from the Fed, sent the dollar firmer as well.
EUR/USD fell as low as 1.4504 at midday in New York with US corporate treasurers heavy buyers of dollars across the board. USD/JPY reached 89.95 before stalling ahead of Japanese exporter offers between 90.00 and 90.10. Cable held key support around 1.6185/1.6200 this morning in London, bottoming at 1.6206. That level was retested this afternoon and held, sparking a bounce to the 1.6270s at the close.
Commodity currencies traded with an easier tone but held above the base of recent ranges. 0.9035 was the low for AUD, which closed around 0.9165. While USD/CAD reached 1.0652, ending at 1.0615.