Currency Updates:
U.S. Dollar Trading (USD) the Dollar hit day highs on Friday after heavy stock market selling in Asia continued into Europe. The selloff was a combination of profit taking and Greece Austerity vote uncertainty which proved unfounded as the parliament passed the measure Sunday night. The response so far in Asia on Monday has been positive although rioting in Greece is a stark reminder of the social cost of reform.
The Euro (EUR) the EUR/USD dipped under 1.3200 but found good support at 1.3160 and is currently tracking higher back towards 1.3300 as the successful Greece vote inspires fresh risk taking. In US stocks, DJIA -89 points closing at 12801, S&P -9 points closing at 1342 and NASDAQ -23 points closing at 2903. Looking ahead, January German WPI is forecast flat at 0.0% m/m.
The Japanese Yen (JPY) USD/JPY rally is picking up momentum as the major tested Y77.80 on Friday and is threatening to break above the Y78 level to target Y80. Crosses are helping lift but the biggest change in the market is the outlook for Japanese growth which is weakening. Q4 GDP came in at -0.6% Q/Q.
The Sterling (GBP) was heavy on Friday pulling sharply back to Monday lows at 1.5730 before once again finding support. So far on Monday cable is nearly back to 1.5800. Resistance above 1.5900 proved too much for cable last week which moved sharply higher in the January. A successful Greece resolution could prompt a retest and move to 1.6000 a key level in 2011.
Australian Dollar (AUD) was under heavy selling pressure on Friday as the RBA downgraded the growth and inflation outlooks for 2012 in their Quarterly Monetary statement. The market has been overbought and the move from 1.0800 to 1.0650 has helped shake out the weak longs and now a move higher is much easier technically.
Oil & Gold (XAU) Gold was volatile on Friday hitting a new week low briefly under $1710 before staging a sharp rally back above $1720 into the weekend close. OIL/USD traded in line with the rest of the market down in Europe but rallied into the weekend closing near $99 a barrel.
