Currency Updates:
U.S. Dollar Trading (USD) markets fell in the US session quite heavily with US retail sales weaker than expected and the European crisis rolling on. The FOMC held at 0.25% as widely expected but the statement was mixed with a slight upgrade to the US economic outlook tempered by concerns global risks were increasing. November Retail Sales gained 0.2% vs. 0.6% forecast. In US stocks, DJIA -66 points closing at 11954, S&P -10 points closing at 1225 and NASDAQ -32 points closing at 2579. Looking ahead, Crude Oil inventories forecast at -2.2m vs. 1.3m previously.
The Euro (EUR) the Euro fell down to the key 1.3000 level but failed to break the key level and closed just above. The market was rattled by Germany’s Merkal comments she was against the increase in the ESM bailout facility beyond 500bn. German December Zew forecast at -55.2 vs. -53.8 previously. Looking ahead, October Industrial Production forecast at 2.1 vs. 2.2% previously.
The Japanese Yen (JPY) the USD/JPY dipped with crosses to Y77.70 but then rallied back to Y78 as the market continued to grind higher. EUR/JPY took another step lower to the Y101.50 level stabilizing. The outlook is mixed but the market is watching the BOJ and any comment on the EUR/JPY strength which may become evident if the important cross dips below Y100.
The Sterling (GBP) fell but was better supported than the Euro with traders selling EUR/GBP down to 0.8400. The Major broke 1.5500 but the losses were contained. November CPI came in at forecasts 4.8%y/y down slightly from 5.0% previously. Looking ahead, November Claimant Count forecast at 14.9k vs. 5.3k previously. The Unemployment Rate is forecast at 8.4% vs. 8.3% previously.
The Australian Dollar (AUD) the AUD/USD broke below 1.000 as the sentiment soured during the US session. Some traders were disappointed that the US fed did not mention anything to do with QE3 but the downtrend is also in place and expectations of a move lower in the Aussie are widespread.
Oil & Gold (XAU) Gold continued to slump falling another leg to $1625. Crude bucked the trend of other markets, spiking higher to above $100 a barrel on rumors of Iran military excercises.
