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Forex pairs in this Article » EUR/USD, USD/JPY (Athens) - Elwin de Groot, Economist at Rabobank notes that in the absence of tangible news from the Western front, it is the Eastern front that is raising its voice now.

Key Quotes

“Japanese and Chinese senior officials have told US politicians that they are very worried about the potential consequences of a US default on markets. Both countries, China in particular, have large exposures to dollar-denominated investments.”

“The undercurrent of ‘risk-off’ was mostly visible in equity markets with the SP500 down nearly 0.9% and Europeans bourses generally lower as well (E-stoxx 50 -0.2pct). However, several other key markets traded rather directionless yesterday.”

“The yield on 10Y UST’s fell 2bps and 10Y Bund yields were down 4bps. The EUR/USD edged lower to 1.356 having failed to stay above the 1.36 handle and dollar-yen also weakened a tad.”

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