- Fed’s Fisher: US businesses in a “defensive crouch”
- US TIC long-term foreign capital inflows in August nearly $129 bln
- US industrial production falls 0.2% in September versus expectations for a 0.2% rise
- Portuguese budget may not be opposed if tax hikes phased-in: local press
- UK protests EU budget hike of 6%
- EU adopts stricter rules on states with excessive budget deficits; Sanctions after six months of inaction
- Fed moderate Lockhart: Leaning in favor of more QE, dollar not a big factor in Fed’s policy thinking
- Eurogroup’s Juncker: Excessive volatility bad for growth
Sorry for the late wrap up. It’s gonna be short and sweet.
TEUR/USD recouped about about half the ground lost since Friday’s 1.4160 high, reaching 1.3998 late in New York trade as fresh signs that the Fed will adopt QE (Lockhart), hopes that Portugal will be able to pass a budget rose, and on a broad recovery in equities and commodities all factored into the surprisingly robust rally in EUR/USD.
Just after the New York close, earnings from Apple (buy the rumor, sell the news) and comments from Geithner helped spark a dollar recovery. Geithner has been mute on the dollar during its recent sharp slide but today said that the US will not pursue competitive devaluation. Whether you believe him or not is not the point; the fact that it was said is a signal that the US is getting heat from its G20 counterparts and wants to show that it gets the message.
With the market extremely long of EUR/USD (and adding at bad levels today), that subtle shift may help shift sentiment to “sell the rallies” for the next few days from today’s “buy the dips”.