Currency Updates:
U.S. Dollar Trading (USD) July Nonfarm Payrolls came in stronger than expected at 160k vs. 100k and this helped stocks and an already positive investor mood continue into the weekend. The USD was sold aggressively with the strong jobs numbers not seen strong enough to change the FED outlook on monetary policy with most analysts still expecting new measures to be announced next month. Looking ahead, Fed Chairman Bernanke Speaks.
The Euro (EUR) the ECB hangover was short lived with the EUR/USD rallying from the start of Europe till the close on Friday up nearly 200pips. Helping the rally on Friday was the tightening of Italian and Spanish Debt Yields with talk that Spain was getting closer to asking the ESM/ESFS officially for aid. New recovery highs were seen on Monday morning in Asia above 1.2400.
The Japanese Yen (JPY) USD/JPY shot higher after the strong US Jobs data from Y78.25 to Y78.75 but we have seen the major ease back to Y78.50 given with USD weakness from the EUR/USD rally. EUR/JPY is rocketing higher up 200 pips from Friday low at Y95 to be trading well supported above Y97 so far in Asia today. The BOJ meet later this week but are not expected to announce new measures.
The Sterling (GBP) the GBP/USD rallied but was lagging the EUR/USD as the EUR/GBP basked in the Euro positivity. Resistance was seen near 1.5650 and we are looking to retest last week’s highs above 1.5750 if the rally continues. GBP/JPY buying is supporting the rally. Looking ahead, July UK Halifax HPI forecast at -0.5% vs. -1% previously.
Australian Dollar (AUD) the AUD/USD fell immediately after the US jobs data to 1.0500 but as US stocks surged higher we saw the risk sensitive currency move to fresh highs tracking the EUR/USD. The outlook is for more gains above 1.0600 this week if the RBA tomorrow doesn’t surprise the market. Looking ahead, RBA Australian Interest Rate on Tuesday a major risk event for the AUD/USD.
Oil & Gold (XAU) Gold tracked the Euro higher to break back above $1600 an ounce. OIL/USD surged $3 a barrel with the better jobs numbers leading to speculation the US consumer will be stronger than first thought which is a major factor in Oil movements.
