Currency Updates:
U.S. Dollar Trading (US) a wild day of trading ended with the USD little changed after massive gains in the European session were reversed and the FOMC Minutes talked QE3. Stocks ended down at the close after Moody& rsquo s downgraded Ireland in a negative end to the session. In US stocks, DJIA -58 points closing at 12446, S& P -5 points closing at 1313 and NASDAQ -20 points closing at 2781. Looking ahead, Fed Chief Bernanke speaks.
The Euro (EUR) crashed lower in Europe falling as far as 1.3850 on debt contagion fears before rumors of Chinese Greece debt buying helped spark an aggressive short covering rally. The market moved back above 1.4000 on the FOMC minutes and the QE3 talk but then dropped suddenly on the Moody& rsquo s Irish debt downgrade to Junk status. Overall the EUR/USD traded with a low of 1.3836 and a high of 1.4055 before closing the day around 1.3980 in the New York session. Looking ahead, May Industrial Production forecast at 0.5% vs. 0.2% previously.
The Japanese Yen (JPY) broke Y80 as the only economy without major negative news encouraged buyers of the safe haven currency. A move in late US saw Y79 broken and Y78.50 touched 5 min later on large stop losses being hit. The BOJ is known to jawbone at these levels and could spark a sharp rebound rally in Asia. Overall the USD/JPY traded with a low of 78.48 and a high of 80.37 before closing the day around 79.40 in the New York session. Looking ahead, Chinese GDP forecast at 9.4% vs. 9.7% previously y/y.
The Sterling (GBP) tested 1.5800 on bearish European events and stock markets before reversing with the short covering rally back to opening levels near 1.5920. June CPI came in at 4.2% vs. 4.5% forecast and eases some of the pressure on the BOE to hike rates and is another negative for the embattled pound. Overall the GBP/USD traded with a low of 1.5779 and a high of 1.5950 before closing the day at 1.5930 in the New York session. Looking ahead, June Claimant count forecast at 15k vs. 19.6k previously.
The Australian Dollar (AUD) came under heavy selling pressure with the risk sensitive currency causing some major liquidation flows on the major and key crosses like the AUD/JPY. The AUD/JPY crashed to Y83.25 before rebounding on BOJ rumors late in New York Trade. Overall the AUD/USD traded with a low of 1.0524 and a high of 1.0645 before closing the day at 1.0620 in the New York session.
Oil & Gold (XAU) was supported on FOMC QE3 talk and the Ireland Rating Downgrade. Overall trading with a low of USD$1540 and high of USD $1573 before ending the New York session at USD$1566 an ounce. Was able to ignore Global risk aversion as Middle Eastern turmoil trumped and inspired a rally. WTI Oil Closed +$1.90 at $96.80 a barrel.
