- Challenger: US layoffs down 33% from May
- ADP employment report: 473,000 private sector jobs lost in June
- OECD: No risk of deflation for Euro Zone
- California to issue IOUs as legislators fail to pass budget by deadline
- ISM index rises to 44.8; slightly firmer than expected.
- US construction spending falls 0.9%; weaker than expected
- ISM’s Ore: At present pace, index will be positive in three months
- Pending home sales rise 0.1%
- Germany calls for loosened capital requirements for EU banks
- Germany’s Guttenberg: No general credit crunch in Germany; may be a problem next year
- Chicago Fed’s Evans: More concerned about disinflationary pressures than inflation; return to growth in second-half of 2009, 2.5-3 % growth in 2010.
- China asks G8 to debate new reserve currency at next week’s summit: G8 official
- IMF: Notes will be issued only when resources needed; will be tradeable within “official sector”, central banks.
- Oil closes 0.70 lower, reversing earlier gains, at $69.20; CRB gains 0.5%
- S&P 500 ease during PM session, closes up 0.4% after rallying 1.5% earlier in session
The dollar was sold from the outset in the US today with the reflation trade giving prices their first boost in EUR/USD to the 1.4170 area. Sales by the BIS and Russia helped prompt a pullback to the 1.4120/25 area but prices took off like a rocket at midday in New York as Reuters ran a report saying the Chinese had asked the G8 to debate a new reserve currency at next week’s heads of state summit. EUR/USD rose from 1.4125 to 1.4200, absorbing what were rumored to be Chinese offers in the 1.4170/90 region. Mid-East accounts were rumored to have offers from 1.4200 to 1.4220.
Ebbing stock market gains and a reversal to the downside in crude prices helped ease EUR/USD back to the 1.4140s late in the day.
USD/JPY eased from strong offers at 97.00. It dipped to 96.25 after the China news before recovering to 96.65 late.
USD/CAD saw heavy selling from London-based Canadian banks today as Toronto was closed for a holiday. Prices slide from 1.1580 in early New York to as low as 1.1435/40 before rebounding to 1.1490 late. The market was thinned out by the Canada Day hols.
Cable relinquished its leadership role today, trading in a paltry 1.6380/1.6544 range. By sterling standards, that’s barely worth mentioning…