Currency Updates:
U.S. Dollar Trading (USD) US stocks continued higher and the USD remained under pressure as investors searched for higher returns. With easing banking fears the market is now looking to economic data and Central Bank interest rate announcements for direction in FX. In US stocks, DJIA +108 points closing at 11980, S& P +7 points closing at 12 and NASDAQ + points closing at 2717. Looking ahead, January Consumer Confidence is forecast at 54.3 vs. 52.5 previously. November Case Shiller House Prices forecast at -0.9% vs. -1.3% m/m.
The Euro (EUR) The Euro hit fresh year highs before profit taking set in but the outlook is growing more bullish as the ECB is seen more likely to raise rates earlier than the US FED. January PMI survey&rsquo s remain strong with Services at 55.2 vs. 54.2 previously and Manufacturing at 56.9 vs. 57.1 previously. EUR/USD traded with a low of 1.3539 and a high of 1.3687 before closing at 1.3640. Looking ahead, February German Consumer Sentiment is forecast at 5.4 vs. 5.4 previously.
The Japanese Yen (JPY) was stronger against the weak Dollar but mixed against the rest in &lsquo risk on&rsquo trading. News a terrorist attack in Moscow helped the safe haven CHF and JPY but the effects were small and short-lived.Overall the USDJPY traded with a low of 82.28 and a high of 82.94 before closing the day around 82.50 inthe New York session. Looking ahead, BOJ Rate Decision forecast to hold at 0.1%.
The Sterling (GBP) struggled to match the rallies in the rest of the market with the 1.6000 level providing selling protection. EUR/GBP is building strength above the 0.8500 level as central banks diversify into the single currency. Overall the GBP/USD traded with a low of 1.5918 and a high of 1.6016 before closing the day at 1.5985 in the New York session. Looking ahead, Q4 GDP forecast at 0.5% vs. 0.7% previously.
The Australian Dollar (AUD) was buoyant with the rise in copper and Equities supporting the risk sensitive currency. The Central bank outlook for Australia is mixed with some calling for more hikes this year whilst others look for a hold given the recent tragic flooding. Overall the AUD/USD traded with a low of 0.9863 and a high of 1.0024 before closing the US session at 0.9980.
Oil & Gold (XAU) fresh month lows where seen in late US trade on reduced safe haven demand. Overall trading with a low of USD$1332 and high of USD $1354 before ending the New York session at USD$1335 an ounce. Oil came under heavy selling pressure down under $88 a barrel. WTI Oil Closed -$1.90 at $87.70 a barrel.
