 The Pound slid overnight as Moody’s said UK banks could suffer further write downs and Fitch warned that the UK sovereign credit profile deteriorated. The Euro was pressured by Fitch’s warnings on Portugal and Greece, and with commodities and equities down the greenback and Yen strengthened. Commodity currencies did however get a bounce in the NY morning session. |
 The Dollar was firmer against its major European rivals in overnight trading. The main reason for the risk aversion were downbeat comments from rating agencies on Europe and the UK, and a dissipation of the rally started from last Friday’s non-farm payroll report. In Tuesday’s overnight trading stocks were lower and commodities fell as well. |
 This will brings further information on US consumer spending and attitudes, as well as the state of inventories – a sector has been at the forefront of the economic recovery. |
 Overnight higher-yielders and growth linked currencies including the Aussie, Kiwi and Euro rose against the Dollar and Yen as equities were higher in Asia and Europe following the better than expected jobs reading in the US on Friday. Also, French President Sarkozy gave the markets some reassurance that EU nations would come to the aid of Greece following its austerity measures announced last week. In NY trading the Euro and Pound gave up their earlier gains as US stocks were flat giving a sense of risk aversion during the NY morning. |
 With the US economy losing less jobs in February (-36K) than expected, and the unemployment rate remaining at 9.7%, the forex market showed risk appetite helping to boost higher yielders and commodity/growth linked currencies like the Australian Dollar. The Yen, reclaiming its mantle as top funding currency of carry trade slid during the day. |
 The US economy shed fewer jobs than expected in February with the unemployment rate remaining steady at 9.7%. Non-farm payrolls fell by 36K jobs which followed a 26K decrease in January. Expectations had been for a drop in payrolls of 68K and a rise in the unemployment rate to 9.8%. |
 The ECB, while extending some stimulus measures in its interest rate meeting, also took some small steps to tighten monetary policy. The Euro was pressured as a positive report on weekly jobless claims contrasted with the fiscal problems in the Euro-zone. Also we had a downgrade of Deutsche Bank, a negative for the Euro. The BOE did not expand its quantitative easing policy, and the Pound gave up overnight gains in NY trading on general greenback strength. |
The Dollar strengthened in NY trading following interest rate decisions by the ECB and BOE that did not hold much in the way of surprises. Instead traders focused on a better than expected labor market report from the US to help push the greenback higher as there was some risk aversion overnight with the Yen gaining against higher yielders like the Aussie and Kiwi. |
 The ECB is in the middle of a tough balancing act as it is attempting to lay the groundwork for mopping up extra liquidity in the banking system while still maintaining favorable lending conditions and dealing with the fallout from the Greece debt situation. |
Daily Video Recap: Chinese Data Helps Spur Risk Appetite
Fundamental Updates \ Nick Nasad \ 5:19 PM EST \ March 10th, 2010Positive data from China and a strong bond sale by Portugal helped increase risk appetite and boost the Euro against its rivals, while a weak manufacturing report hurt the Pound. Higher yielders were up for the day, with the Yen sliding as a result.