Currency Updates:
U.S. Dollar Trading (US) the keenly anticipated Bernanke speech was the main event and although he did not mention QE3 the sharp sell off immediately afterward did not last. Bernanke talked up the FED having a range of tools to provide additional monetary stimulus and the stock markets ended up over 1% by the end of the day. In US stocks on Friday, DJIA +134 points closing at 11284, S& P +17 points closing at 1176 and NASDAQ +60 points closing at 2479. Looking ahead, July Pending Home Sales forecast at -1.5% vs. 2.4% previously.
The Euro (EUR) did well to end at 1.4500 overcoming lingering debt concerns and the initial Bernanke disappointment. EUR/GBP was a noted outperformer surging to 0.8850. Looking ahead, German CPI forecast at 0.0% vs. 0.4% previously.
The Japanese Yen (JPY) USD weakness dominated the space and the pair reversed back into the recent range unable to continue higher above Y77. The outlook is for more range trading while the USD remains under pressure on one side and the BOJ verbally intervenes on the other.
The Sterling (GBP) struggled to rally and fell further in the sell off then other majors with the market falling out of favor with the Pound. Traders were reminded of the weak growth in the UK economy with Q2 GDP at 0.2% Q/Q. Crosses remained under pressure with EUR/GBP buying and GBP/JPY selling the worst hit.
The Australian Dollar (AUD) the Aussie found support after the selloff post Bernanke speech and surged to week highs on the strong US stock market finish. The outlook is closely linked to the stock market with the pickup in risk appetite making it easy to buy on dips in recently.
Oil & Gold (XAU) gold extended gains above $1800 on USD weakness Friday. Crude tested $83 but the level provided solid support and we rallied into the weekend closing above $85 once again.
