- Bernanke supports mark-to-market accounting but would like to see modifications
- Rep Frank sees uptick rule reimplemented, mark-to-market amended
- Germany’s Steinbrueck: US may have room to spend more; not us
- US intelligence chief: Chinese threat to ship worst in 8 years
- Luxembourg’s Mersch: ECB should explore non-standard easing methods
- US equities rally strongly on Citi news, hopes for rules changes
- Gold falls below $900 on stocks; holds important $890 level
EUR/USD surged along with US equities in morning trade, reaching 1.2821 as stocks rose more than 6% at times during the session. It was unable to maintain those gains and succumbed to heavy profit-taking once it became clear the stock/dollar link had broken, at least temporarily. News that US intelligence was taking seriously the Chinese naval threat sparked a move into the Swiss franc at midday but that move faded late. EUR/USD traded 1.2610/1.2821 in New York.
GBP/USD soared as the lull in risk aversion lifted currencies across the board in the morning. Covering of GBP/CHF shorts was seen in the morning but there were also sizable sellers of USD/CHF in London trade. Cable fell from 1.3805 to 1.3688 in New York as the dollar selloff failed to keep pace with the rally in US share prices.
USD/JPY swung around in a 97.90/98.93 range in New York. The story was similar to the price action above as stock strength weighed on the dollar early in the day before losing that link shortly afternoon. USD/JPY helped lead the dollar comeback, sprinting up to 98.70 from 98.40 in under 5 minutes.
EUR/JPY tried to trigger stops above the 126.10 level this morning but slipped back on long-liquidation as the euro fell versus the dollar. It reached 124.63 from 126.10.