EU leaders plan another summit
On Wednesday, Germany and France called for an additional EU summit, during which officials will expand on the issues of growth, competitiveness and employment in the area. The President of the European Council Herman Van Rompuy has announced that the meeting will be held at the beginning of the year, probably on February 7 and 8, 2012.
Cable closed in New York at 1.5512, with the rate seen recovering off New York pullback lows of 1.5474 as traders reported decent widespread demand for the pound. The rate continued its recovery in Asia, moving up from an early posted low of 1.5509 to 1.5545, as the dollar lost ground across the board on a paring back of risk aversion positions in Asia ahead of the weekend. Cable settled between 1.5520-1.5535 through the afternoon, resting on the base of that range into Europe. Euro-sterling consolidated between 0.8388-0.8397 through Asia, with the rate able to extend the base to 0.8383 in early Europe. Offers seen placed to 1.5550, a break to open a move towards 1.5590-1.5500. Support seen at 1.5510-1.5500.
Euro-dollar closed in New York at 1.3016, with the rate marking Asian session lows at 1.3012 in opening trade before edging higher. Fitch’s upgrading of Indonesia to investment grade Thursday also aided the tone. Tokyo fixing demand for euro-yen also helped to lift euro-dollar off its early lows, with the rate meeting resistance from decent sell interest from leveraged sellers placed between 1.3040-1.3050, which capped the move at 1.3045. The rate settled between 1.3020-1.3245 through the Asian afternoon, holding just off that base into the European open. Weekend looming and without any further negative news from the eurozone could prompt some short covering though we are still aware that a downgrading of eurozone sovereigns awaits in the wings. A break of 1.3050 to open a move to 1.3080, with offers placed between 1.3080/1.3110. Bids await at 1.2985-1.2980.
Gold had a mixed day, with the metal falling in early trade after opening at 1,574. Prices slipped to 1,564 in early Europe before picking up to 1,594 around midday. New York then sold gold down to 1,560, resulting in some further long liquidations. Talk in Asia is that there are now some sovereign bids down near 1,500 should the metal fall further. Gold closed in New York at 1,579 and has since picked up to 1,589 this morning as some mild risk appetite returns ahead of the weekend, but the move continues to look a little unconvincing with crude oil prices well off recent highs, and the inability of euro-dollar to rally despite a good Spanish auction and US data yesterday. Today’s support is down at 1,560 and 1,531, with resistance at 1,622 and 1,641.
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