FX Update — USD
USD has carried a negative tone into the afternoon session in response to extended selling pressure in equities and continued flight to quality, which has pushed bond yields lower across the board. With no economic data — except the NAHB Housing Market Index at 1:00am EDT — markets continue to be pressed by fears surrounding Freddie and Fannie’s capital adequacy after a Barron’s article this weekend hinted at a bailout of the GSEs.
The USD Index, down 0.35% to 76.915, is near session lows but is well within Friday’s range. EUR/USD, up 0.35% to 1.4738, has extended support above 1.47 and is lined up for a run at 1.4750 with further upside likely limited to overnight highs just below 1.4770.
Cable, up 0.1% to 1.8683, continues to trade in the middle portion of today’s narrow range and is below Friday’s opening price. USD/JPY, down 0.33% to 110.16, continues to resist slipping below 110 despite extended selling pressure.