Currency Updates:
U.S. Dollar Trading (USD) the market was up and down with conflicting headlines out of Europe concerning the weekend summit could end without a resolution and that it would be pushed back to Wednesday next week. A more positive headline on potential combining of existing rescue funds sparked a rally into the close. In US stocks, DJIA   +37 points closing at 11541, S& P +5 points closing at 1215 and NASDAQ -5 points closing at 2598.
The Euro (EUR) the main source of market volatility continued with focus on political wrangling ahead of the weekend summit. The main players are the German and French leaders and the Greece parliament given the ongoing rioting in Greece. The EUR/USD dipped below 1.3700 before closing just under 1.3800. Looking ahead, October German IFO forecast at 106.3 vs. 107.5 previously.
The Japanese Yen (JPY) the USD/JPY tested Y77 overnight on expectations the BOJ/MOF may take steps to support the Japanese economy in a way which would lessen the effect of the strong Yen. EUR/JPY was down and then up late in the day as sentiment flips. The crosses will be in action on Monday after the EU summit with the possibility of large moves in either direction.
The Sterling (GBP) September Retail sales jumped 0.6% vs. 0.0% forecast in a positive release but the market was in no mood to buy GBP/USD aggressively in the European session and continued to trade in a 1.5700-5800 range. Looking ahead, September Public Debt forecast at 12bn vs. 13bn previously.
The Australian Dollar (AUD) the AUD/USD found support at 1.0150 in Europe and reversed sharply back to 1.0300 in the US session as stock markets reacted positively to the suggestion that the EU may combine the different bailout funds already in place to increase the size and power of the current funds. The risk currency is a favorite of traders expressing risk on or off and will be in play given any result next week.
Oil & Gold (XAU) traded in a range between $1610-30 an ounce with the buyers cautious given the recent selling. A negative outcome over the weekend may lead to Gold support on Monday if investors once again search for a safe haven. Oil dipped below $85 as selling continued for a second day but eventually found support and rallied back to $86 in late US trade.
