Currency Updates:
U.S. Dollar Trading (USD) the Dollar selling continued on Friday from the surprise FOMC statement to extend Interest rates at near record lows until 2014. Q4 GDP was weaker than expected 2.8% vs. 3.0% forecast and added to the profit taking in US stocks seen in New York. In US stocks, DJIA -22 points closing at 12734, S&P -7 points closing at 1318 and NASDAQ -13 points closing at 2805. Looking ahead, December Personal Income forecast at 0.4% vs. 0.1% previously.
The Euro (EUR) the Euro broke above 1.3200 as the short squeeze pushed higher into the weekend with many traders caught short below 1.3000 from earlier in the week. The market could still go back to selling mode if the Greece debt deal falls apart but most are confident that a successful outcome is likely be announced as early as today. Looking ahead, EU January Consumer Sentiment forecast at -20.6 vs. -21.1 previously.
The Japanese Yen (JPY) the USD selling overflowed onto the USD/JPY which broke below Y77 and back into more familiar levels seen in late December and early January. The rally has disappointed the bulls who failed to generate sustain Yen selling interest. EUR/JPY fell but is well supported on dips towards the key Y100 level.
The Sterling (GBP) the GBP/USD rallied towards 1.5700 and closed above the figure. Gains have not matched the Euro which is gaining ground and testing 0.8400 on the EUR/GBP cross. Cable traders are looking forward to the MPC rate meeting next week with some expectations the UK central bank may increase its own form of Quantitative easing.
Australian Dollar (AUD) the AUD/USD posted a double top near 1.00680 and has come under heavy profit taking pressure so far in Asia on Monday morning. The market has built up substantial long positions across the AUD market with EUR/AUD still near record lows and this is hampering the topside in the short term. Little data this week means the AUD/USD will take its cue from Global stock markets.
Oil & Gold (XAU) Gold extended the rally to $1740 before topping out and pulling back into the weekend on mild profit taking. Oil struggled to hold above $100 on Friday and this prompted a fall back to lower $99 into the weekend.
