FX Highlights

  • The USD is trading higher as Bank of America posted a larger than expected third quarter loss and US equities trade lower, EUR pulls back from fresh 14 month high as EU officials express concern about EUR strength and EU trade balance turns to deficit as exports fall, GBP trades higher supported by gains in cross to JPY, GBP rally sparked by speculation the BOE may pause its asset purchases, JPY trades at a three week low versus the USD as interest rate spreads widen in favor of the US in response to reports of stronger US recovery and better than expected US third quarter earnings, CHF trades lower as Swiss retail sales decline, commodity currency pressured by weaker equity markets, CAD pressured by report of a bigger than expected drop in Canada's CPI
  • Focus turns to today's release of US industrial production, capacity utilization and Michigan consumer sentiment
  • EU August trade balance falls 4 bln, a 9.7 bln surplus was expected, EUR lower
  • Australia's PM Rudd says interest rates will rise, AUD supported by a strong economy's, AUD lower
  • Swiss August retail sales fall 1% compared to 1% rise last month
  • Canada September CPI comes in flat and down 0.9% y/y, CAD lower
  • Treasury Secretary Geithner says first stage of US recovery is better than expected but recovery will be slower than typical
  • Fed's Fisher says recovery is underway but economy still weak, now is not the time to raise interest rates
  • Despite the Feds unprecedented printing of money inflation remains tame with prices falling 1.3% y/y
  • Soros says US economy will be a drag on world growth
  • Japan's Gyohten says Japan, China and US should work to stabilize the USD
  • US equity markets set to open lower, European equities lower, Nikkei closed 19 points higher

Upcoming Events

  • US - Friday, September industrial production will be released expected at 0.2% compared to 0.8% last month along with September capacity utilization expected at 69.9 compared to 69.6 last month and October University of Michigan survey expected unchanged at 73.5
  • CAN - Friday, September CPI will be released expected at 0.1% compared to flat last month (already released)