The EURUSD is up but of its highs on a short squeeze. The GBPUSD is up, while the EURGBP is steady. All markets are keeping a sharp eye on the short squeeze in European sovereign debt and on the threat of forex intervention..
In the GBP, post-election uncertainty has the GBP in play. Our bias for the EURUSD and GBPUSD has turned mixed
The EURCHF has bounced higher. SNB intervention tactics have changed. We will have to see what happens next.
The USDJPY pair is higher and the EURJPY cross is up sharply. Rating agencies warn that Japan's public finances are a worry. Some note that virtually all JGB bonds are owned by the citizens of Japan. The Hatoyama government wants a lower exchange rate and is pressuring the BOJ to promote growth. Some traders focus intently on the Japan vs. U.S. 2-yr note spread (only the U.S. 2-yr moves much).
