- US GDP rises 3.5% in Q3; autos, homebuyer credit big contributors
- Weber: Unconventional measures to end next year; credit to stay weak through middle of 2010; negative inflation rates over.
- Kansas City Fed survey falls to +6 in October from +16 in September; latest in a number of weak Fed surveys in last two weeks, suggests recovery slowing
- Market News International: ECB to raise currency concerns at G-20 next week
- US sells $31 bln 7-year notes at 3.141%; auction not as well received as earlier auctions this week
- Oil rises $2.50 to $80.00; Gold rises $17 to $1045
- S&P 500 rallies 2% to 1063.50
The dollar went into a tailspin versus all but the JPY after the US GDP report came in stronger than the Goldman-fueled consensus of about 2.7% growth.
GBP was stand out once again, but the action was far more flow-driven than fundamental. Talk of a GBP 2 bln buy order from the Saudi Monetary Authority made the rounds as the pound shot from the 1.6470 area to 1.6604 before relenting, all in about 40 minutes time.
EUR/USD’s rally was less spectacular, but it was impressive nonetheless, erasing the bearish sentiment that had enveloped the market in the last several days. Prices bounced from key technical support in the 1.4680 area, displaying that the EUR uptrend is still very much intact. Prices retraced nearly 61.8% of the decline from the 1.5061 level, reaching 1.4858 before stalling.
USD/JPY moved up with the resumption of risk. AUD/JPY, GBP/JPY, CAD/JPY, you name it, it ramped higher. Session highs of 91.62 were reached from the 90.65 area ahead of GDP.
AUD and CAD were hugely benefited by the risk-resumption. AUD gained more than 2 cents from its overnight lows while CAD gains were a bit more muted owing to the recent verbal intervention from the BOC. USD/CAD fell to 1.0656 from 1.0820 highs while AUD rose to 0.9181 from 0.8944 overnight.