- UK’s Darling: Growth to return by late 2009
- US PPI falls 0.9%, ex-food and energy -0.1%
- US housing starts fall 1% but single-family starts rise for fifth month
- IMF’s Blanchard: Global recession ending but recovery to be slow
- SNB’s Jordan: Switzerland to exit recession later; still selling CHF
- Incoming Bank of England MPC member Posen: ECB to hike rates first
- Oil reverses Monday losses, rises 4% to $69.35
- S&P 500 recovers 1% to 990
Sterling was the star performer today as traders took advantage of early strength to sell short the pound. The trouble is, the early strength spurred even greater late strength, trapping shorts and forcing them to scramble for cover. Sellers were seen in the 1.6400/50 window but a short-covering bid then took over and ramped the pair as high as 1.6586 in New York afternoon trade.
EUR/GBP was sold by real-money accounts, driving that cross as low as 0.8525 despite comments from incoming MPC member Posen suggesting Europe would be first to raise rates.
EUR/USD was a laggard today as EUR/GBP was a weight on the pair. It’s New York highs were unable to overcome the highs posted after ZEW data this morning, topping out at 1.4146. China was a seller into strength in the 1.4130s, traders reported.
AUD/USD rebounded nicely in US trade, the reflation trade being put back on was a big factor but Chinese buying near the lows really helped set the pace. The rebound reached 0.7373 during the NY afternoon. 0.8195/0.8275 are the parameters that need to be overcome near-term to liven up trade.
USD/JPY was dead money in New York, trading in a tight 94.60/80 range for the bulk of the session.