- US retail sales fall less than expected, -0.1%/0.7% ex-autos
- US weekly jobless claims rise to 654k/continuing claims 5.317 mln, a record
- SNB cuts Libor target 0.25, narrows corridor it to 0-0.75%, buys foreign currency and bonds
- US business inventories fall 1.1%
- US household net worth fell $11.2 trln in 2008
- GM says does not need scheduled government payment of $2 bln this month
- Powerful congressman tells SEC, FASB to fix mark-to-market “or Congress will”
- General Electric losses AAA rating; stock rises
- BOEs Barker sees economy worsening
- German finmin says Germany would aid Ireland if need be
- US equities rise 4%, oil jumps 11%
EUR/USD surged late in the day, fueled by rising US equities and a clear signal from Germany that it would aid Ireland if need be. A secondary support came via the massive intervention undertaken by the Swiss National Bank. Not only did they buy Euros directly against the CHF but their intervention helped strengthen Central European currencies versus the Swiss franc. This will benefit those holding CHF-denominated mortgages in CEE and should help bolster European banks. Ultimately, the euro itself is a beneficiary.
EUR/USD reached 1.2945 very late in the US session. It now targets 1.2990.
EUR/JPY broke through 126.10 amid a broad wave of Euro buying late in the day. It reached 126.40 before consolidating above 126.10.
EUR/CHF 1.5337 late in the day. The SNB bought in excess of a combined $15 bln in EUR/CHF and USD/CHF and parked itself on the bid in the 1.5180 region on pullbacks. SNB president Roth said the SNB intends to keep the Swiss franc from strengthening further against the euro. Dealers will be on guard for further intervention to maintain a weaker franc.
USD/CHF reached 1.1965 before easing a bit as the dollar fell in the afternoon.
Cable was dragged higher by EUR/USD but MPC Barker reiterated how the UK is benefitting from the lower pound, saying it is an important stimulus. It closes at 1.3945 after reaching 1.3980/85.
AUD/USD overcame the 0.6560 barrier option that had contained that market for weeks on end as hopes for a reflating global economy are spurred by the rise in equities and commodities. 0.6641 is next resistance for the Aussie.
