Currency Updates:
U.S. Dollar Trading (USD) talk of a temporary Greek exit led to USD strength on Friday with the EUR/USD reversing back to 1.2500. US stocks did manage to bounce off lows however as the US FED Chief sent an open letter to congress reiterating the FOMC majority saw need for further stimulus if economic data remains week. US July Durable Goods increased 4.2% vs. 2.4% forecast but ex transport numbers were weak. Looking ahead, no economic data Monday for the US.
The Euro (EUR) came under pressure as some German politicians talked about the costs of a temporary Greece exit from the Eurozone and no fresh help was coming from German and French leaders after they met with the Greece leader Samaras. Over the weekend however Germany’s Merkel commented that her fellow politicians should weigh their words carefully when talking about a Greece exit. Support has been seen so far at 1.2500.
The Japanese Yen (JPY) the USD/JPY managed small gains as the QE3 expectations continued to drop for the US as recent data remained stronger than forecast. The direction of USD/JPY will be greatly influenced by the Jackson Hole speech and the eagerly awaited talk has a chance to push the major out of its Y78-80 range.
The Sterling (GBP) pulled back further but in a quiet fashion to close just above the 1.5800. Q2 GDP was at -0.5% as expected and created little movement. A positive week of trade for the Pound and bulls will still be looking to buy on the dips and potentially target 1.6000 if the Friday Jackson Hole Bernanke Speech delivers. Looking ahead, German IFO August Expectations forecast at 95 vs. 95.6 previously. Business Climate is forecast at 102.7 vs. 103.3 previously.
Australian Dollar (AUD) the AUD/USD was hammered for a second day breaking 1.0400 before finding support at 1.0380 and bouncing into the US close. The weekend saw new announcement of major stimulus programs out of China but the market was in no mood to buy on Monday and quickly moved to new lows. The AUD has potentially entered into a new downtrend with the last two weeks of selling, but if Gold and Euro continue to push higher it unlikely that the Aussie will be left behind
Oil & Gold (XAU) Gold consolidated before pushing to fresh week highs above $1675 in the US session Friday with its recent strength seemingly unstoppable. OIL/USD was strong reversing the Thursday’s losses to reclaim $97 in strong trade. Middle Eastern tensions and Storms in the US Gulf are underpinning the recent rally.
