Fx trading ranges had been relatively tight on Tuesday as the market digested disappointing readings on UK public finances, a potential downgrade of Portugal and soft Canadian inflation statistics. The Swiss franc had been the top-performing G10 currency whilst the pound sterling appeared to be the laggard.
The over-all tone of trading was lackluster as liquidity commences to evaporate in advance of the holidays. The euro climbed early in the period after Chinese Vice Premier Wang stated China "has taken concrete action" to aid Europe with its debt problems nevertheless the trade later corrected and EUR/USD declined when Moody's mentioned it may downgrade Portugal's credit ranking. The statement comes after similar moves from other rating's companies but it led to a sharp EUR selloff.
Chinese authorities have reportedly assured to obtain 4-5 billion of Portuguese financial debt in early 2011 soon after a visit there last week. The flight from the euro served to raise the Swiss franc to the top of the G10 complex. EUR/CHF in addition fell to a new all-time low.
The Canadian dollar was in focus throughout the North American treatment because of to key reports on inflation and consumer spending. The key surprise was a drop in November inflation to 2.0% year-over-year in comparison to the +2.4% prior and +2.2% expected. Inflation had lately ticked greater and that helped push USD/CAD to parity. That now appears to have been a statistical false impression with inflation concerns currently once again on the back burner.
Retail sales for October provided a moderate lift for CAD after it climbed 0.8% in comparison to the 0.5% estimated. A large portion of the outperformance had been flushed away by a revision in the September information to +0.4% from +0.6%.
News that the Federal Reserve and other central banking institutions have prolonged swap lines was casually received by markets. The lines enable for less complicated borrowing in the event of a capital squeeze and are viewed as a protective measure. They were planned to run out in January nevertheless the due date has now been pushed to Aug. 1, 2011.
The over-all tone of trading was lackluster as liquidity commences to evaporate in advance of the holidays. The euro climbed early in the period after Chinese Vice Premier Wang stated China "has taken concrete action" to aid Europe with its debt problems nevertheless the trade later corrected and EUR/USD declined when Moody's mentioned it may downgrade Portugal's credit ranking. The statement comes after similar moves from other rating's companies but it led to a sharp EUR selloff.
Chinese authorities have reportedly assured to obtain 4-5 billion of Portuguese financial debt in early 2011 soon after a visit there last week. The flight from the euro served to raise the Swiss franc to the top of the G10 complex. EUR/CHF in addition fell to a new all-time low.
The Canadian dollar was in focus throughout the North American treatment because of to key reports on inflation and consumer spending. The key surprise was a drop in November inflation to 2.0% year-over-year in comparison to the +2.4% prior and +2.2% expected. Inflation had lately ticked greater and that helped push USD/CAD to parity. That now appears to have been a statistical false impression with inflation concerns currently once again on the back burner.
Retail sales for October provided a moderate lift for CAD after it climbed 0.8% in comparison to the 0.5% estimated. A large portion of the outperformance had been flushed away by a revision in the September information to +0.4% from +0.6%.
News that the Federal Reserve and other central banking institutions have prolonged swap lines was casually received by markets. The lines enable for less complicated borrowing in the event of a capital squeeze and are viewed as a protective measure. They were planned to run out in January nevertheless the due date has now been pushed to Aug. 1, 2011.
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