Currency Updates:
U.S. Dollar Trading (USD) led by a recovery in global banking stocks the markets had another positive day yesterday. The dollar was sold as safe haven demand was pared back. In economic data, September ISM services came in at 53.0 vs. 52.9 forecast and ADP September Employment +91k vs. 75k forecast. In US stocks, DJIA +131 points closing at 10940, S& P +20 points closing at 1143 and NASDAQ +55 points closing at 2460. Looking ahead, Weekly Jobless Claims forecast 410k vs. 391k previously.
The Euro (EUR) was well supported on dips with the panic leaving the market and stocks rallying. September PMI services fell to 48.8 vs. 49.1 previously. August Retail Sales fell -0.3%m/m as forecast. Sentiment was helped by German Chancellor Merkel comments her government was ready recapitalize banks if needed. Looking ahead, ECB Interest Rate Decision forecast to hold at 1.5% and Press Conference from President Trichet.
The Japanese Yen (JPY) USD/JPY tested Y77 as crosses lifted in the US session but was unable once again to break the key topside resistance and the major fell back into the recent range. EUR/JPY and AUD/JPY continued to edge higher with stocks well off Tuesday&rsquo s lows. The recent downtrend could be under threat if shorts begin to cover aggressively.
The Sterling (GBP) the Pound struggled to fully take advantage of the positive mood in the market after failing to break 1.5500. Hurting sentiment was the downgrade of Q2 GDP to 0.1% from 0.2% Q/Q originally. Looking ahead, Bank of England Rate meeting expected to hold at 0.5%.
The Australian Dollar (AUD) some strong August Retail sales (0.6% vs. 0.3% forecast) helped the AUD/USD to rally above 0.9600 in a solid performance in the European and US sessions. Most crosses saw AUD gains with buying notable on the AUD/JPY which is a favorite of investors when mood improves.
Oil & Gold (XAU) Gold Tested $1600 before rallying up to $1650 and stabilizing near the key resistance. Crude Enjoyed solid gain back towards $80 a barrel tracking stock market direction closely.
