- Canadian retail sales fall 0.1% in July, far below expectations
- Belgian business sentiment rises to -3.4 from -5.1
- Germany’s Schaeuble: In future crises, creditors need to take part in solutions; will not extend euroTARP past 2013
- BOE’s Dale: Big inflation risks in both directions
- Greece’s Papandreou: No hike in VAT
- Geithner: China currency policy hurts US economy
- US bond yields end off lows: 2-year not at 0.431%, unch. 10-year note 2.56% down 2 bp
- S&P 500 falls 0.5% to 1134
- Gold makes new record high at $1296 intraday, closes at $1291 on weak dollar
Central bank buying on the dips shortly after the US open helped send EUR/USD to fresh highs for the move at 1.3440 after bouncing from the 1.3360/65 area. The BIS was the noted buyer helping send the single currency to fresh heights. We dipped as low as 1.3353 in mid afternoon on comments from the German finance minister which traders interpreted as a ham-handed attempt to weaken the burgeoning EUR.
AUD/USD soared along with EUR/USD, as did gold. AUD overcame a 0.9600 a barrier but soon stalled, falling back from 0.9601 to an intraday low as 0.9510. Stops were tripped below the 0.9530 level on the pullback. We bounced to close at 0.9555.
USD/JPY suffered at the hands of lower US yields. 2-year note yields fell to 0.40% and 10-yr notes to 2.50% before bouncing back late. USD/JPY slid to 84.27 before getting a lift from a rise in yields late in the session. We end at 84.52. Last confirmed sighting of the BOJ was at 84.75 during London hours before they packed up and hid.
USD/CAD rallied today as weak retail sales prompted fears that the Canadian economy is faltering along with that of the US. Hopes for a further BOC hike dimmed further. USD/CAD jumped from overnight lows of 1.0192 to 1.0355/60 highs intraday. We end at 1.0303.
USD/CHF dipped below reputed bids at 0.9850 briefly but bounced back to 0.9885 before falling into an afternoon consolidation between 0.9860 and 0.9885.
Cable was sold by India overnight above 1.5700 and struggled to gain traction there after on fears that the BOE could follow the Fed down the QE path once again. We close at 1.5660.