EUR Greece downgraded by Fitch to B+ amidst growing concerns they won't be willing to meet the likely stringent austerity measures that might accompany any more rescue money from the Eurozone or other aid organization. Now the question is which model do they take without making it a more expensive precedent for the other PiGS countries in case they too come knocking. Risk is off the table but the momentum so far is not that fast. The pace will depend on the solution tha will come out of the Eurozone block. Still have to see 1.40 giving way as investors liquidate more. AUD Any risk-off situation is likely to also affect AUD with the huge carry trades positions put through AUD. 1.05 being tested today and might see it fall to test 1.0250 or fleet with Parity again? With a hike possibly in H2, dips, deep enough could offer some attraction to re establish longer term longs for yield. JPY Boring. 80 supported on back of weak Japanese fundamentals after the twinn tragedies but weak US data and continued QE2 action keeps USD soft. Perhaps 80-82? GBP Looks weak though the threat of inflation and switching out fro EUR supports some. 1.60 might go if EUR collapses.
