EURUSD dips back below 1.30
What happened overnight
– China widens USDCNY trading band to +/- 1% from +/-0.5% previously
– WSJ reports Moody’s might cuts ratings on 114 European institutions
– NZ’s Key says government is considering ways to resist NZD strength
The USD’s slow grind higher continued overnight, with EURUSD trading briefly below 1.30 for the first time since mid-February, dragged by a WSJ report that Moody’s is weighting rating cuts to 114 European institutions. Spanish and Italian yields are higher on the day, but otherwise the risk picture is a relatively tame one. AUDUSD is closing the gap it opened overnight and is only a touch weaker on the day at 1.0354. USDJPY has gained ground from the day’s low at 80.45 and is trading at 80.75. Stocks closed with mixed results in Asia and are trading generally stronger in Europe. NZD is the underperformer of the day, burdened by verbal intervention against currency strength by Prime Minster Key.
The PBoC fixed USDCNY up 81 pips to 6.2960 after the weekend’s announcement of a widening in the USDCNY intraday trading band. USDKRW rose slightly to 1138 after the Bank of Korea lowered its 2012 economic growth forecast to 3.5% from 3.7% previously.
Click here to read the full report: Americas FX Daily
Credit Suisse
FIXED INCOME RESEARCH & ANALYTICS