Market Overview

OVERNIGHT SUMMARY 
 

~ China NDRC Zhang: to continue moderately loose monetary policy, continue active fiscal policy, recent Sino-US trade friction regrettable
~ ECB Trichet: Too early as of today to declare the crisis over
~ ECB Weber: Monetary policy was not one of the culprits for causing crisis
~ SNB Roth: Swiss unconventional policy measures worked well

EUR/USD quietly consolidated between 1.4865/1.4905 for most of the European morning session before coming under heavy pressure once the US market arrived. EUR/USD was weighed down by broad USD strength and weak equity markets and the market took the opportunity to knock out the lower leg of a 1.4800/1.51 DNT option. EUR/USD bounced from the 1.4800 level amid talk of Asian sovereign demand and the pairing received a further boost by comments from ECB officials indicating that exit strategies will be enacted in 2010. The ECB did announce some changes to the collateral criteria for the March auction that will be less accommodating to the banks participating. EUR/USD closed around 1.4865.

AUD/USD fell another 0.5% on Friday and ended the week completing a key outside week reversal lower. Funds and investors in general are paring risk positions ahead of the US Thanksgiving holiday and long AUD has been a popular investor strategy over the last few months. Hedge and model funds have been the main sellers - but the move lower has been cushioned by sporadic real money and sovereign name buying. AUD/USD closed around 0.9145.