FX Highlights

  • The USD is trading mixed erasing early overseas losses which sent the USD to a fresh 14 month low, the early USD decline was attributed to improving risk sentiment as earnings at Apple beat expectations and Fed officials indicate US rates will remain low, GBP gains were limited by report that UK public-sector borrowing hit a record high, EUR gains limited by comments from EU and ECB officials expressing a desire for a strong USD, a French official says EUR are at 1.50 is a disaster, AUD supported by hawkish RBA policy minutes, CAD lower ahead today's BOC policy decision
  • Focus turns to today's release of US PPI and housing starts and Canada's wholesale sales and BOC rate decision
  • Japan to sell more bonds, JGB issuance may top ¥50 trln to cover the shortfall in tax revenue, JPY higher
  • RBA minutes for the October 6th policy meeting state that low rates for extended period threatens inflation and that strong AUD reflects improving market sentiment, Australia's September merchandise imports rise 14%, AUD higher
  • ECB President Trichet expressed concern about excessive FX volatility, French Finance Minister Lagarde says that the Eurogroup reiterated its desire for strong USD, an advisor to French President Sarkozy said that at some point EUR strength will become unbearable and the EU would have to act, EU's Juncker sees clear signs of economic recovery but now is not the time to end fiscal stimulus, possible exit strategy in 2011, EUR higher
  • UK public-sector borrowing for September rises to a record high 19.433 bln from 12.311 bln last month, GBP mixed
  • OPEC officials state that moving away from the USD to another currency for oil settlement would take time
  • US equity markets set to open higher, European equities 0.5% higher, Nikkei closed 100 points higher

Upcoming Events

  • US - Tuesday, September PPI will be released expected at 0.1% compared to 1.7% last month along with September housing starts expected at 610k compared to 598k last month
  • CAN - Tuesday, August wholesale sales will be released expected 1% compared to 2.8% last month