Currency Updates:
U.S. Dollar Trading (USD) plummeted across all majors and commodities as the world’s central banks joined forces to prompt an epic relief rally. Central banks around the globe announced a co-ordinated plan to ensure cheaper dollar funding for European banks in an attempt to thaw out liquidity channels. Prior to the announcement, China’s PBOC’s 50 basis point cut of its reserve requirement ratio, the first seen since 2008, ensured market sentiment started on the front foot heading into the North American session. Added to this a positive reading in ADP employment seen at 206K (biggest gain in a year) well above the 130K forecast, further gave the market confidence that the Fridays NFP figures may come in positive. US share markets soared on Wednesday with NASDAQ up 4.17%, Dow Jones up 4.24%, and the S&P up 4.03%
The Euro (EUR) rallied from lows of 1.3255 seen in Asia before news of unilateral central bank efforts to reduce dollar funding costs pushed the Euro to highs of 1.3530. In domestic stock markets, European shares also rallied sharply with the FTSE up 3.2%, whilst the DAX also surged 5.0% higher.
The Japanese Yen (JPY) gained considerably against the USD, trading in line with market reaction and flow on effect of broadly weaker dollar. The USDJPY pair fell from 78.16 to lows of 77.30
The Sterling (GBP) with little development in the domestic front, the GBP also rallied against the USD, moving from lows of 1.5525 to 1.5780.
The Australian Dollar (AUD) was the best performing currency on Wednesday, rebounding off lows of 0.9943 back above the parity level first and foremost post China RRR cut news, before the news of Central bank joint efforts saw the currency leg up further to 1.0330, attributing to a 400 point move in quick succession. UPDATE: Aussie Dollar eases from overnight highs as October Retail sales come in at 0.2% vs 0.4% forecast, whilst Building approvals fall -10.7%. China PMI in at 49 adds further pressure to the AUD trading at 1.0225 in Asia
Oil & Gold (XAU) XAU soared by US$29.80 an ounce to US$1743.20 whilst Oil also rallied by US$0.57 a barrel to US$100.36, with gains limited as Oil inventories came in at 3.9 million well above expectations.
