Currency Updates:
U.S. Dollar Trading (USD) most markets fell overnight as the stock markets pulled back on profit taking and the USD was strong against most except the resurgent British Pound. The market is awaiting the Spanish long term bond Auctions today in Europe for direction for the rest of the week. Looking ahead, Weekly Jobless Claims forecast at 370k vs. 380k previously. Also ahead, March Home Sales forecast at 4.62mn vs. 4.59mn
The Euro (EUR) The EUR/USD fell briefly below 1.3100 in the European session closing at opening levels but in striking distance of resistance at 1.3150 if today’s Spanish bond Auction comes in strong and spurs a rally. The EUR/GBP fell as the GBP soared and should fall further given the major technical break.
The Japanese Yen (JPY) The USD/JPY stayed in a 25 pip range with the USD remaining supported and action only on the GBP/JPY cross which punched back above Y130. The outlook will come down to EUR/JPY and GBP/JPY which will help direct the USD/JPY between Y80-Y83. Only a break of Y80 and lack of action of BOJ would change the outlook for the medium term.
The Sterling (GBP) the main mover in the markets Wednesday as we saw GBP/USD break above 1.6000 after the MPC minutes showed those members looking to increase the UK Asset Purchase program (printing money) had decreased to only 1 in the April MPC Meeting. EUR/GBP finally broke 0.8200 after weeks of teasing the level. Looking ahead, Spanish 10 year Bond Auction.
Australian Dollar (AUD) the AUD/USD is struggling to find direction of late with sellers failing at 1.0300 and buyers scared close to 1.0450. The market will be looking to the European debt markets and the stocks later tonight for fresh direction. UPDATE Brazil Cuts Interest Rates by 75Bps to help stimulate.
Oil & Gold (XAU) Gold was heavy falling slowly all day down to $1640 an ounce. Oil also weakened with the market coming reversing the week’s rally quickly.
