FX Highlights

  • USD is trading lower and GBP drops below 1.6000 as investors debate the potential timing of the withdrawal of stimulus, a Fed official writes in today's Wall Street Journal that the Fed may have to withdraw monetary stimulus before it's obviously necessary, the draft G-20 communicate says that G-20 countries will avoid premature withdrawal of stimulus, stocks fall in Asia and rise in Europe and the US, GBP pressured by sell stops under 1.6000 and heavy selling in cross trade to the JPY and EUR, JPY supported by safe haven flows as the Nikkei closes 2.6% lower and a statement from Japan's finance minister that he opposes intervention in foreign exchange markets, EUR supported by report of rising German consumer confidence,
  • Focus turns to today's release of US durable goods, new home sales and Michigan consumer sentiment
  • Fed's Warsh says Fed may have to withdraw monetary stimulus before it is obviously necessary and be aggressive in reversing accommodative policy actions
  • G-20 draft communiqué says G-20 countries will avoid premature withdrawal stimulus, plans to revamp bank regulation
  • G-20 to establish a coordinating body for international economic cooperation and to subject economic policies to peer review
  • Japan's new Finance Minister Fujii says he is opposed to intervention in foreign exchange markets, JPY higher, trades at seven month high versus USD and breaks 90.00
  • EU August M3 rises 2.5%, German consumer confidence rises to a 16 month high up 4.3%, ECB's Mersch says the financial crisis is not completely over and that the ECB would not implement an exit strategy until interbank markets are secured, EUR higher
  • Swiss KOF Institute 2009 cuts Swiss growth outlook, SNB's Jordan says the SNB will continue to combat CHF appreciation versus the EUR,EUR/CHF trades higher on intervention rhetoric, CHF mixed
  • US equity markets set to open higher, European equities 1% higher, Nikkei closed 278 lower

Upcoming Events

  • US- Friday, August durable goods will be released expected at 1.1% compared to 5.1% last month along with the final University consumer sentiment expected at 70.2 and August new home sales expected at 450k compared to 433k last month
  • CAN -Friday, no major Canadian economic data is due for release today