European FX Midday recap

14:10CET

These have been the topics hitting the wires this morning and that have been most affecting the markets thus far:

    * China raises reserve requirements 50 bps (wire service initially incorrectly reported it was 50bps rate hike)
    * EU/IMF financial aid plan for Ireland likely to be announced next week -EU sources
    * Irish Minister: Impossible to say how much money is going to be required until the European/IMF team have examined banks
    * IMF’s Strauss Kahn: Europe has “serious growth problem”, productivity lags in Southern countries with competiveness problems
    * IMF’s Strauss Kahn:  Sovereign debt crisis not over in Europe
    * ECB’s Gonzalez Paramo: Bank’s role in systemic risk council will not affect its’ price stability objective
    * ECB’s Stark: Monetary policy strategy needs to be geared towards medium term, resist fine tuning temptation
    * Bernanke defends Fed’s policy, turns tables on China – Bloomberg
    * Hong Kong govt: To lower loan-to-value ratio for mortgages.  To raise stamp duty for short-term housing transactions.
    * IMF’s Strauss Kahn: Face problem that some may think worst of crisis over, so urge to make changes fades
    * BOJ’s Morimoto: Expansion of asset buying one strong option if economy worsens – Kyodo
    * Italy lower house passes 2011 budget law
    * German October PPI +0.4% m/m, +4.3% y/y, stronger than median forecasts +0.3%, +4.1% respectively

Technically speaking, a down morning for the USD; although there are very encouraging signs of a change, especially in EUR/USD, where the break back below 1.37 may be the leading factor for a new round of USD buying in the afternoon. Sell EUR rallies with stop on today's highs remains the best strategy as the unit has hit the extreme OB level too many times today.

Posted via email from MT4