USD takes a breather, Focus on Italy - The....>

FOREX: USD takes a breather, Focus on Italy

- The USD largely remained in consolidation mode as focus turned to the

political situation in Italy. A raft of headlines hit the wires throughout the

session, the main one from League's Borghi said cancellation of Italian debt is

not on the coalition government programme.

- EURUSD squeezed to $1.1820 on react, but was quick to pare gains as the USD

encountered renewed support. The US 10y touched fresh multi-year highs above

3.09% pressing the EUR to $1.1778. GBPUSD briefly made a show above $1.3500,

before traders faded the move to hold $1.3485/90.

- USDJPY improved to Y110.35 but failed to challenge the Asia high (Y110.39) and

drifted lower.

- Amid an improving equity picture, commodity based currency pairs continued to

generate strong gains against the USD. Gold rallied $5 off its low dragging AUD,

NZD & CAD to the top of the G10 leaderboard. USDCAD traded under C$1.2800, AUD &

NZD above $0.7500/$0.6900 respectively.

- EM's trimmed some of yesterday's losses, ZAR, RUB & COP the big winners.