Currency Updates:
U.S. Dollar Trading (USD) was stronger against most pairs in Europe’s after Italy’s bond Auction failed to stop yields remaining at 7%. The sentiment improved during the US session and the dollar gave up some of it gains with bargain hunter snapping up stocks from depressed levels. Chicago PMI remained strong at 62.5 vs. 61 forecast. Weekly Jobless Claims moved higher however to 381k vs. 366k. Looking ahead, no data today.
The Euro (EUR) with bond auctions failing to sell the full allotment the market sold EUR/USd down to 1.2860 supports before reversing with positive US stocks and profit taking ahead of the last trading day of the year. Some support was also seen from reports that Eurobonds are still an option in the future if the right changes are made to the EU treaty. Looking ahead, no data today.
The Japanese Yen (JPY) USD/JPY moved lower on USD weakness but most crosses held ground or gained on the day with US stocks up 1%. Support is seen in lower Y77.50 but more attention is on EUR/JPY which found support at Y100 on its first test.
The Sterling (GBP) failed to bounce with the rest of the majors and instead remained at the 1.5400 level while crosses lost ground. EUR/GBP move back to 0.8400 with traders suggesting year end flows are particular heavy on GBP sales. The outlook is negative while below 1.5500 on Cable.
The Australian Dollar (AUD) the US session saw AUD/USD lead the other currencies higher with a move to 1.0150. This was despite heavy gold selling and Oil weakness with the market instead following stocks. The range is still holding even as GBP and EURO break to the downside and this is letting the Aussie gain on most crosses. Update December HSBC PMI revised to 48.7 vs. 49 first printed.
Oil & Gold (XAU) Gold slipped to the next support level at $1520oz before paring losses later in the day. OIL/USD tested $98.50 support before rallying late in the day back to $100 a barrel.
