This morning’s euro bounce lasted around four hours.
With the Swiss National Bank declaring it had resolved on a price of CHF 1.20 per euro, the single currency leapt higher, taking stock markets with it. However, the hard part, as Japan has discovered, is in holding the line against ‘evil speculators’. Risk aversion has returned with a vengeance ahead of the US open today, as Wall Street plays catch-up with the rest of the world and Europe digests economic data that shows that the situation in Germany is getting worse, not better. German factory orders fell by 2.8% in July from the previous month, a worse decline than the 1.5% drop between May and June, and far bleaker than the 1.5% fall expected by economists.
US data is due at 3pm (London time), with the publication of the ISM non-manufacturing index, while some more clarity on current Fed thinking might be given at 6.10pm (London time), when Minneapolis Fed president Narayana Kocherlakota (who hovers between hawkish and dovish views on monetary policy) speaks.