Opened at $1.5768 in Asia after being under pressure for the whole NY session on fading risk appetite as doubts build over Greece’s ability to implement its austerity measures. The Asia session opened to further rating news (after S&P and Fitch both announced downgrades to Spanish banks yesterday afternoon) with Moody’s downgrading ratings of 6 European sovereign; and putting UK, France and Austria on a “negative” outlook. The move prompted a sell off in EUR/USD and GBP, and the pound fell from early highs of $1.5771 to $1.5702 before a weak bounce to $1.5721. Cable remains under pressure late into the asian session. EUR/GBP picked up from early lows of stg0.8360 after opening at stg0.8364 and edged up to stg0.8381 compounding the cable fall. GBP suffered across the board with the exception of sterling-yen which bounced sharply following the BOJ announcement of further easing. The cross rallied from early lows of Y121.68 to Y122.51 as dollar-yen leapt from Y77.36 to Y77.95. Focus this morning is on the UK CPI and RPI data at 0930GMT
EasyForexNews Research Team