The London price action was pretty tame as the market catches its breath after that major selloff in risk on the back of an uninspiring Geithner yesterday. European bourses were down a modest -0.5% and US futures suggest a flat open. Gold rallied another $8 to $924/oz currently, in a sign that fear still lurks in the background. Volatility in FX land was relatively modest as the market looks to yet another Geithner testimony in the NY morning.
EUR/USD added 30 points towards the 1.2950/55 pivot. Look for resistance into 1.30 initially, with support at the 1.29 mark. A break to either side of these levels should elicit some good price action. The yen crosses barely budged and USD/JPY was sitting near the 90 level while EUR/JPY was by 116.60 ahead of the NY open. USD/CAD was modestly higher as oil prices edged a touch lower to just below $38/bbl. With oil inventories due up today we would expect the volatility in USD/CAD to be rather palpable.
UK employment data was a touch better than expected as jobless claims printed 73.8K in January after a 79.9K add the prior month. Comments from Bank of England Governor King, however, were extremely dovish. He reaffirmed that the UK remains in a deep recession and alluded to lower interest rates and a rise in the money supply in the near future. This weighed on GBP and cable edged about -40 pips lower in London trading towards the 1.4370 area. Hearing some retail demand into 1.4350 containing the downside right now, but the overall bas still remains lower.