Currency Updates:
U.S. Dollar Trading (USD) the markets have opened up strong in Asia with the news that an emergency G7 meeting is to take place later today to focus the Spanish debt crisis. US stocks already are rallying and the USD is giving back gains from last week on the fresh hope something can be done to restore the confidence in the Eurozone. Looking ahead, May ISM Services forecast at 54.7 vs. 54.6 previously.
The Euro (EUR) the EUR/USD short covering began as rumors of G7 meeting and new plan to tackle the debt crisis swept the market on Monday. Talk is that the ECB and EU leaders have been charged with drafting proposals for a deeper fiscal Union by the end of the month. The EUR/USD moved from 1.2400 to 1.2500 in the US session and has popped higher in Asia on confirmation the G7 will be having a meeting today.
The Japanese Yen (JPY) the USD/JPY was sidelined overnight as the market went risk on and this kept the major in a tight range above Y78. The yen crosses all rallied and we are still in a positive mood today. The Japanese officials are stepping up their warnings and rate checking but as of yet no confirmation of physical intervention has been seen.
The Sterling (GBP) UK banks are closed for the 4 day Jubilee celebrations so the GBP/USD was relatively quiet and has not yet broken its downtrend channel to join in with the other majors in a rally. The GBP/USD closed at 1.5400 and would be targeting 1.5500 in a short squeeze was to occur later today. Also ahead, May EU PMI services forecast at 46.5. Also April German Industrial Orders forecast at -1 vs. 2.2% previously.
Australian Dollar (AUD) the AUD/USD enjoy a sharp rally with the EUR/USD as the shorts covered and fresh risk takers took advantage of the recent heavy selling. The AUD/USD is testing 0.9750 and a break will open up 0.9840 on the topside. The RBA meet today and is a large risk event with the market pretty evenly split on whether any change will come from the central bank.Looking ahead, RBA forecast to hold at 3.75% vs. 3.75%.
Oil & Gold (XAU) Gold consolidated gains overnight with a tight range back to $1610 before bouncing to close at $1620. OIL/USD bounced back to $85 tracking the stocks and Euro.
