Currency Updates:
U.S. Dollar Trading (USD) stocks slumped and the Dollar soared on Friday with S&P downgrading most of Europe on Friday night. The market had been expecting such a move which included France and the after the initial heavy sell off was able to recover some of the losses into the close. In US stocks, DJIA -48 points closing at 12422, S&P -6 points closing at 1289 and NASDAQ -14 points closing at 2710. Looking ahead, US Bank Holiday.
The Euro (EUR) traders sold the Euro across the board as rumors and then a confirmation of downgrades swept the market Friday night. The biggest news was that France had been included and this set the French government into damage control. The big concern is that EFSF will also be downgraded and that Fund managers would have to sell any non AAA assets. To make matters worse news that the Greece debt talks have collapsed over the weekend is sure to add more nervousness to markets Monday. Looking ahead, ECB President Draghi talks.
The Japanese Yen (JPY) the EUR/JPY got all the attention on Friday down to fresh 12 year lows near Y97. The MOF head commented that Euro falls had been rapid but did not talk about intervention on Monday. The outlook for the USD/JPY is mixed with the major currently being pulled down by EUR/JPY selling and no one ready to buy the USD/JPY at these levels when intervention is still 130 pips lower at the Y75.50 level.
The Sterling (GBP) remained under pressure with the EUR/USD led selling in the markets but was able to find support at 1.5250 and closed above the 1.5300 level. The EUR/GBP enjoyed sharp selling toward recent lows at 0.8250. The market is still looking to sell the GBP vs. most currencies whilst the neighboring European debt crisis rolls on.
Australian Dollar (AUD) did very well to hold up closing above 1.0300 and surprising many with the strength seen in recent days. EUR/AUD hit fresh all-time lows near 1.2250 and is continuing to trend lower in extremely oversold territory. Looking ahead the global stock markets will direct the next AUD/USD movement.
Oil & Gold (XAU) Gold fell back to $1630 support which held but traders cautious as the crisis may overwhelm the speculator demand for Gold with investor demand for Cash via liquating Gold investments. Oil dipped on the European downgrade news but is being supported from more rumbling out of Iran. Good to watch Stocks and the $100 per barrel level.
