Currency Updates:
U.S. Dollar Trading (USD) the US Dollar was on the back foot as stock markets surged on improvement in manufacturing surveys around the globe. January Chinese Manufacturing PMI jumped to 50.5 vs. 49.8 forecasts, UK PMI jumped to 52.1 vs. 49.7 previously and finally the January US manufacturing 54.1 vs. 53.9 previously in a positive sign for world growth. In US stocks, DJIA +83 points closing at 12716, S&P +11 points closing at 1324 and NASDAQ +34 points closing at 2848. Looking ahead, Weekly Jobless Claims forecast at 375k vs. 377k.
The Euro (EUR) the EUR/USD continued to gyrate violently throughout the trading day down in Asia and hitting fresh week lows under 1.3050 before reversing and catching the market short heading back to 1.3200. Talk continued that a Greece debt deal was very close but as of writing nothing had been finalized. The market is in two minds with the bears expecting more downgrades and trouble in the Eurozone while the bulls are looking higher on hopes the worst is behind us. Looking ahead, December PPI forecast at -0.2% vs. 0.2% previously.
The Japanese Yen (JPY) the USD/JPY reversed to fresh lows near Y76 but remained above the figure as cross buying supported the major. The EUR/JPY reclaimed above the Y100 level and the AUD/JPY found support under Y81 before reclaiming and pushing higher once again as US stocks rallied. The outlook for most cross is constructive with USD/JPY expected to find support at Y75.
The Sterling (GBP) the GBP/USD broke easily above 1.5800 as the remarkable rally continued. The market has been up daily for nearly two weeks and has decoupled with the Euro. EUR/GBP is close to testing the lows near 0.8250 and a break would suggest the 0.8000 in coming weeks. Looking ahead, Construction PMI forecast at 52.6 vs. 53.2 previously.
Australian Dollar (AUD) the AUD/USD was well supported on dips and reversed more aggressively than most to fresh month and 2012 highs above the 1.0700 key resistance. The 1.1100 all-time highs are in view but the stock market will have to continue to stretch gains with local economic data mixed enough to allow the central to consider cutting rates.
Oil & Gold (XAU) Gold tested but failed above $1750 before easing to $1745. Oil broke down after the outside day reversal yesterday.
