Currency Updates:
U.S. Dollar Trading (USD) traders sold heavily on Tuesday with the weak US jobs numbers combining with increasing European Bond Yields. Fears are rising that the Debt crisis might storm back into the markets with Spanish and Italian budgets both under pressure and recessions forecasted for most austerity hit EU countries. Looking ahead, Crude Oil Inventories forecast at 2mn vs. 9mn barrels the week before.
The Euro (EUR) although it was in the center of the storm the downside was limited as solid support was found above 1.3000. More selling was seen on the EUR/JPY which hit fresh month lows under Y106. The outlook is for more selling why the Spanish and Italian bonds continue to fall sharply.
The Japanese Yen (JPY) the USD/JPY sell off continued with crosses slumping helping send the major below Y81 and to Y80.60 where large buy orders from semi-official government agencies stabilized the market. The BOJ is likely to try and protect the Y80 with jawboning at least and could announce new measures to help the market reverse direction.
The Sterling (GBP) the GBP/USD fell back but found support in the lower 1.5800 region before reversing back with the support seen on the EUR/USD. The outlook is mixed but if EUR/GBP can break 0.8200 and move to the historical support at 0.8000 then the GBP/USD should be spared any large moves from European debt shocks. Update German March WPI at 0.9% vs. 1.0% previously.
Australian Dollar (AUD) the AUD/USD came under pressure with risk off trade in Europe reversing an earlier rally to 1.0350 and falling to fresh multimonth lows near 1.0230. April Consumer sentiment fell along with housing finance and this adds to calls for the RBA to cut rates in May. Looking ahead, March Unemployment Change forecast at 6.7k vs. -15.4k previously.
Oil & Gold (XAU) Gold dipped in Europe but when support was found we reversed direction sharply to fresh day highs above $1660. Oil was sold back to $101 but support was found and $100 has not been tested yet.
