Chinese comments give EUR a lift

By: Sean Lee

Van Rompuy and Barroso in Beijing, meeting with PBOC today PBOC Zhou: Will continue to invest in EU debt Will continue to back measures to help EZ out of debt crisis, through IMF and EFSF support Chinese Vice-President in Washington for meeting with US President, reinforced these comments Australian economy: WestPac-MI consumer confidence index +4.2% New Zealand retail sales stronger than expected at +2.2% Fed’s Lockhart: Current monetary policy appropriate Nikkei and Hang Seng gain over 2%; Gold steady at $1725/oz Fairly quiet session with risk sentiment picking up in the wake of yesterday’s BOJ easing and also the comments out of China regarding the EZ debt crisis. Chinese officials again reiterated, through the PBOC in Beijing and the visiting delegation to the US, that China will continue to buy EZ debt and will support debt-crisis measures by backing the IMF and the EFSF. EUR/USD spent the morning trading in a tight range near 1.3125 but it gapped higher after the PBOC comments, driven mainly by stop-loss buying in EUR/JPY. More stops are eyed in the cross above 103.50 but they remain safe for now. Ranges: EUR/USD 1.3106/74; EUR/JPY 102.84/103.46 The NZD/USD was a strong mover in early trade, bolstered by good retail sales data. This also helped underpin AUD sentiment, which was furthered strengthened by consumer confidence data and rising stock markets. Ranges: 1.0664/1.0740 USD/JPY was mainly influenced by flows in the cross pairings, trading a 78.34/63 range. Cable 1.5673/1.5722; EUR/CHF 1.2067/80

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