Currency Updates:
U.S. Dollar Trading (USD) the Dollar gained in the European session as fears over Spain heated up but the downside was contained and US stocks rebounded. Support for the market will come from a formal request for a bailout from Spain and pressure is being applied daily to speed up the process. Fed Member Evans stated QE will continue until the Unemployment rate falls below 7.0%. Looking ahead, Q2 Final GDP forecast at 1.7%. Weekly Jobless Claims at 378k vs. 382k. August Durable Goods Orders forecast at -5% vs. 4.1% y/y.
The Euro (EUR) the EUR/USD rallied after finding support under 1.2850 and this is frustrating the bears who have been given every reason to sell but the downside is slowing down. A reversal will require the cooperation of Spain and some positive moves towards officially asking for a bailout. Some concerns about Greece and the broader EU Banking bailout is adding to the uncertainty and capping rallies.
The Japanese Yen (JPY) USD/JPY is range trading in a 30 pip range between Y77.60-90 and is waiting for further catalyst to continue either the selling or stage a relief rally. EUR/JPY is now under Y100 and is struggling still to find support.
The Sterling (GBP) the path of least resistance was downside overnight with losses mounting in the European session and fresh week lows below 1.6150 seen before the broader reversal in the US session tracking the EUR/USD higher. Looking ahead, Q2 Final UK GDP forecast at -0.5% vs. -0.5%. September Unemployment Change forecast at 10k vs. 9k previously.
Australian Dollar (AUD) the AUD/USD rallied off fresh week lows under 1.0350 and is sitting just under the previous support at 1.0380 and is looking to stock markets and the RBA rate meeting next week for fresh direction. Most economists see the RBA cutting rates but there is far from a consensus with some seeing the RBA on hold. Looking ahead, no data today.
Oil & Gold (XAU) Gold Slipped sharply to $1740 before staging a rally to $1755 by the end of the US session. OIL/USD tested support at $90 before closing just above the figure in another day of bearish trade.
