Currency Updates:
U.S. Dollar Trading (USD) sentiment darkened overnight with heavy stock losses following some negative Eurozone developments. Weak Chicago PMI at 58.4 vs. 60.4 previously and Bond dealer MF Global bankruptcy added to the selling which inspired fresh USD strength on safe haven demand. In US stocks, DJIA -276 points closing at 11955, S& P -31 points closing at 1253 and NASDAQ -52 points closing at 2684. Looking ahead, October ISM Manufacturing forecast at 52 vs. 51.6 previously.
The Euro (EUR) the EUR/USD crashed through 1.4000 on news that the Greece PM would put the bailout up for a referendum. Widening Italian and Spanish bond yields also added to worries that the EU had not done enough to stop the Debt Crisis. The Euro slumped on most crosses as well with EUR/GBP slumping to 0.8600 after opening near 0.8800.
The Japanese Yen (JPY) the much talked about intervention started yesterday with BOJ/MOF buying pushing the USD/JPY from Y75.50 to Y79.50 in a few frantic hours of Asian trade. European and US traders took profit and the market finished back at Y78 and many will be waiting for any further intervention in future sessions.
The Sterling (GBP) performed better than most other risk assets as EUR/GBP selling supported GBP/USD. GBP/USD still tested 1.6000 in Europe before rallying in the US session back to opening levels above 1.6100. Looking ahead, Q3 GDP forecast at 0.4% vs. 0.1% previously. October Manufacturing PMI forecast at 50 vs. 51.1 previously.
The Australian Dollar (AUD) The Aussie fell back to 1.0500 on risk off trading in the US session but this level held and we rebounded into the close. The market is cautious ahead of the RBA meeting today in which we may see a rate cut and push the AUD/USD lower. Weak Chinese October PMI at 50.4 hurt sentiment in Asia Tuesday with concern the world&rsquo s second largest economy might be slowing down.
Oil & Gold (XAU) Gold fell back to $1700 on the USD strength seen with Japan intervened on USD/JPY. Oil was under pressure at the start of the US session falling back to $91.50 before bouncing to back above $93.
