The fall in Swiss banking stocks has been the focus for Europe. In the wake of the news that UBS was being investigated for market manipulation, today they reported a hefty slump in Q3 (-21%). This has seen their share price fall by nearly 5%, which has dragged fellow bank & rival CSFB down by just over 2.5% on the local index. Although the news has had no direct impact on the FX markets it has weighed on the already damp sentiment towards the embattled Franc.
Into European trading and the USD got a boost via the back-door, as the Euro was dented by the poor early run of German numbers. As a result spot was forced above its recent short-term top at 1.2510. Stops were erased from order books in the 1.2525 area as the move higher encountered little resistance.
Fresh offers around the 1.2530 level finally stall this topside momentum while EUR/CHF selling late in the morning helped the price drift back to 1.2505/10 resistance turned support. Bulls target a run to 1.2550 should the USD continue to work higher but much will depend on the outcome of US data
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