US Dollar Surges on possible future FED rate hikes, Commodities Plunge
CURRENCY TRADING SUMMARY – 30th MAY 2008 (00:30GMT)
· U.S. Dollar Trading (USD) strong gains across the board were made yesterday as speculation of bottoming in the US economy focused markets on possible future US rate hikes to counter inflation. US data yesterday came out very close to expectations with Preliminary 1st quarter GDP coming in at 0.9% and jobless claims at 372K. US crude inventories were down 8.8M and this lead to a sharp rally in crude oil above $133 but this was subdued and subsequently sold off over $6 per barrel which supported the USD into the close. In US share markets the NASDAQ was up 21.62 points (.87%) and the Dow Jones was up 52.19 points (.41%). Crude Oil closed down $4.32 ending the New York session at $126.71 per barrel. Looking ahead, Personal Spending and Personal Income out today along with Core PCE price index and Chicago PMI.
· The Euro (EURO) traded under 1.5500 for the first time in three weeks as German unemployment rose 4K in May. Consumer Confidence also weakened in the Eurozone coming in at -15 vs. -12 forecasted for May. Overall the EUR/USD traded with a low of 1.5485 and a high of 1.5665 before closing the day at 1.5515 in the New York session. Looking ahead, German Retail sales out today expected at 0.6% for April along with European Flash CPI Estimates forecasted at 3.5%.
· The Japanese Yen (JPY) Looking ahead, Japanese Industrial Production out for April expected to come in at -0.3%. traded lower as equities lead by Nikkei’s 3% rise encouraged speculators to take on more risk. Data out early Friday included Core April CPI coming in at 0.9% vs. 1.0% expected and April unemployment rate coming in higher at 4.0% vs 3.9% forecasted. USDJPY traded with a low of 104.61 and a high of 105.88 before closing the day around 105.50 in the New York session. UPDATE April Industrial Production ACTUAL -0.3%.
· The Sterling (GBP) was sold heavily into the European session on the back of woeful Nationwide house prices which fell 2.5% vs. an expected fall of 0.5%. A recovery came on the back of stronger CBI Distributive trades realized coming in at -14 vs -25 forecasted. Data out early Friday GFK consumer confidence came in at -29 vs -25 forecasted. Overall the GBP/USD traded with a low of 1.9674 and a high of 1.9820 before closing the day at 1.9760 in the New York session.
· The Australian Dollar (AUD) edged lower on the back of heavy gold sales and stronger USD. In economic data out yesterday New Private capital expenditure came in at -2.5% much lower than the +3.1% expected. AUDJPY supported, holding above the key 100 level. Overall the AUDUSD traded with a low of 0.9536 and a high of 0.9638 before closing the day at 0.9555 in the New York session.
· Gold (XAU) fell heavily with other commodities in response to the stronger dollar and inflation fighting comments from Fed member Fisher. Overall gold traded with a low of $873.5 and high of $903 ending the New York session at $878 an ounce.
TECHNICAL COMMENTARY
|
Currency |
Sup 2 |
Sup 1 |
Spot |
Res 1 |
Res 2 |
|
EUR/USD |
1.5410 |
1.5486 |
1.5515 |
1.5664 |
1.5761 |
|
USD/JPY |
103.89 |
104.61 |
105.55 |
105.88 |
106.55 |
|
GBP/USD |
1.9614 |
1.9674 |
1.9745 |
1.9852 |
1.9870 |
|
AUD/USD |
0.9511 |
0.9537 |
0.9555 |
0.9639 |
0.9700 |
|
XAU/USD |
850.00 |
860.50 |
878.00 |
909.85 |
930.90 |
· Euro – 1.5515
Initial support at 1.5486 (May 29 low) followed by 1.5410 (May 6 resistance). Initial resistance is now located 1.5664 (May 29 High) at followed by 1.5761 (May 28 high).
· Yen – 105.55
Initial support is located at 104.61 (May 29 low) followed by 103.89 (May 28 low). Initial resistance is now at 105.88 (May 29 high) followed by 106.65 (Feb 28 high).
· Pound – 1.9745
Initial support at 1.9674 (May 29 low) followed by 1.9614 (May 21 low). Initial resistance is now at 1.9852 (May 23 high) followed by 1.987 (76.4% retracement of 2.00027-1.9363)
· Australian Dollar – 0.9555
Initial support a 0.9537 (May 29 low) followed by 0.9511 (May 19 low). Initial resistance is now at 0.9639 (May 29 high) followed by 0.9700 (round number).
· Gold – 978
Initial support at 883.4 (May 29 low) followed by 860.5 (May 14 low). Initial resistance is now at 909.85 (May 28 high) followed by 930.9 (May 27 high).
