Currency Updates:
U.S. Dollar Trading (USD) the market finished strong in the US session with the notable close above 13000 on the Dow Jones Index ahead of this weak major risk event in the ECB LTRO today in Europe. US data was strong with consumer confidence soaring in February as employment picks up. The promises of low FED interest rates and more ECB funding is helping investors feel more confident in the Future.
The Euro (EUR) the Euro fell going into Europe as the ECB suspended accepting Greek bonds as collateral but given the relatively small size of this asset and expectations of a strong take up of lending tomorrow the bulls are looking to retest 1.3500 in Asia on Wednesday. How the EUR/USD will react tonight to the second LTRO is up for debate with a strong pickup suggesting bank stress still exists but also offering a short term solution to this issue. Looking ahead, German Unemployment Change is forecast at -5k vs. -34k previously. Also ahead, February Chicago PMI is forecast at 61.5 vs. 60.2 previously. Also Fed Chief Ben Bernanke Speaks.
The Japanese Yen (JPY) the USD/JPY found support above Y80 and consolidated at Y80.50 with traders expecting more consolidation ahead of the US non-farm payrolls on Friday which if strong could help reenergize the stalled rally.
The Sterling (GBP) tested 1.5800 but held firm and soared above 1.5900 and is threatening to test 1.6000 in coming sessions in a strong bullish move overnight. The February CBI Retail Survey improved to -2 vs. -22 previously and EUR/GBP fell to 0.8960.
Australian Dollar (AUD) the AUD/USD grinded higher but since we already close to resistance it was hard work towards 1.0800 overnight. January Retail Sales came out at 0.3% m/m as expected and helped the pair push above 1.0800 in Asia trade Wednesday. Looking ahead, January Consumer Credit forecast at 0.2bn vs. -0.4% previously. Also Q4 CAPAX forecast at 3.2% vs. 12.3% previously.
Oil & Gold (XAU) Gold tracked the USD weakness moving up to $1790 and is in striking distance of $1800 the high from last August. OIL/USD continued to pull back on a second day of profit taking as no new Iran threats emerged to stoke the fear rally. Support was found at $106.
