Currency Updates:
U.S. Dollar Trading (USD) strong risk appetite allowed US stocks to rally at the open but the market reversed direction sharply as profit taking into the month end took hold. US Q2 GDP was revised higher to 1.7% vs. 1.6% previously. Weekly Jobless Claims improved to 453k vs. 469k previously. October Chicago PMI increased to 60 vs. 56 previously. In US stocks, DJIA -47 points closing at 10788, S& P -3 points closing at 1141 and NASDAQ -7 points closing at 2368. Looking ahead, September ISM Manufacturing is forecast at 54.5 vs. 56.3 previously. Also released, August PCE Index previously at 1.4% y/y.
The Euro (EUR) news that the Anglo Irish Bank bailout was not as bad as feared allowed Irish Bond Yields to fall and offset the negative news of Spain&rsquo s Downgrade. September German Unemployment fell 40k and helped underpin a move higher in Europe before month end volatility was seen in New York. EUR/USD traded with a low of 1.3558 and a high of 1.3685 before closing at 1.3640. Looking ahead, German Retail Sales are forecast at 0.4% vs. -0.3% previously m/m. Also released, August Unemployment Rate is forecast at 10.0% vs. 10.0% previously.
The Japanese Yen (JPY) took advantage of the weak USD to push slowly towards Y83 the crosses supported and the pair stayed inside a small trading range. The previous point of intervention was at Y82.88 and the market will be interest to see the Governments response to the Yen trading at those levels. Overall the USDJPY traded with a low of 83.15 and a high of 83.82 before closing the day around 83.50 in the New York session.
The Sterling (GBP) was up and down all day with an initial rally in the open of New York sold aggressively over 200 pips lower. EUR/GBP hit new month highs and threatens the major 0.8715 resistance. UK Consumer Confidence fell to -20 in September. Overall the GBP/USD traded with a low of 1.5668 and a high of 1.5925 before closing the day at 1.5725 in the New York session.
The Australian Dollar (AUD) suffered from profit taking and the reversal of stocks in the US session but there is still interest to buy on dips. AUD/NZD is pushing higher now above 1.3100. August Building Permits fell -4.7%. Overall the AUD/USD traded with a low of 0.9623 and a high of 0.9736 before closing the US session at 0.9690.
Oil & Gold (XAU) Tested $1300 before rebounding and closing near opening levels. Overall trading with a low of USD$1296 and high of USD $1316 before ending the New York session at USD$1308 an ounce. Oil made good gains testing $80 an barrel. WTI Oil Closed +$2.11 at $79.97 a barrel.
