The chain of events that would lead to the rebound of the US Dollar began with worse than expected existing home sales in NY earlier today and continued with a softer equity markets and uncertainty as to what comments may come from this weekends G-20 meeting. Today in Asia we saw a follow through of this dollar move, most specifically in the British Pound which was in an early free fall that was the centerpiece of the day's events.
The woes of the British Pound continued today after its demise began at 1.6370 levels yesterday in London. The Pound longs took a hit versus the Dollar today as it was perched on 1.6060 session highs which quickly disintegrated in a sweeping stop driven wave to four month lows near 1.5915. Against the yen the moves were even more vicious as GBP/JPY went into a straight line decline from 146.50 levels to lows shy of 144.30. Conversely, EUR/GBP blew through a five month high to highs just shy of 0.9200. The initial move begun yesterday was on the back of BOE Governor King's comments that a weaker pound is helpful in pushing the UK economy into the right direction with a focus on exports.
EUR/USD continued its drop from 1.4800 that began in NY, bottoming out near 1.4615 before reversing to 1.4690 levels on EUR/GBP strength. AUD/USD was initially weaker to 0.8610 on sagging commodity prices. Oil was down almost 3% heading into Asia and Gold spent its first session in over a week under the $1000.00 mark. Silver hit an almost two week low of $16.02 as well.
The Yen was well supported with equities on the defensive; USD/JPY dropped from 91.30 levels to break 90.60, and the crosses were all softer due to the risk asset weakness with GBP/JPY obviously paving the way from other moves, including a 130 pip drop to 132.50 for EUR/JPY.
It has become apparent that traders are looking to this weekends G-20 meeting with caution, and it safe to assume that position squaring will continue through NY once the Durable Goods and New Home Sales data is out of the way. Whether or not this Dollar reprieve is just a mirage or not will remain to be seen. Have a nice weekend.
Upcoming Economic Data Releases (London Session) prior expected
| 25-29 SEP | SEP | GE | Import Price Index (MoM) | AUG | -0.90% | 0.70% |
| 25-29 SEP | SEP | GE | Import Price Index (YoY) | AUG | -12.60% | -11.40% |
| 9/25/2009 | 6:45 | FR | Consumer Confidence Indicator | SEP | - - | -36 |
| 9/25/2009 | 6:50 | FR | Gross Domestic Product (QoQ) | 2Q F | 0.30% | 0.30% |
| 9/25/2009 | 6:50 | FR | Gross Domestic Product (YoY) | 2Q F | -2.60% | -2.60% |
| 9/25/2009 | 8:00 | EC | Euro-Zone M3 s.a. (YoY) | AUG | 3.00% | 2.70% |
| 9/25/2009 | 8:00 | EC | Euro-Zone M3 s.a. 3 mth ave. | AUG | 3.40% | 3.10% |
| 9/25/2009 | 8:30 | UK | Total Business Investment(QoQ) | 2Q F | -10.40% | -10.40% |
| 9/25/2009 | 8:30 | UK | Total Business Investment(YoY) | 2Q F | -18.40% | -18.40% |
| 9/25/2009 | 8:45 | SZ | SNB Governing Board Member Thomas Jordan Holds Speech | 25-Sep | ||
| 9/25/2009 | 9:30 | SZ | KOF Institute September Economic Forecst | 25-Sep |
