Currency Updates:
U.S. Dollar Trading (USD) the market stabilized overnight quiet for most of the day before suddenly after the US close JPMorgan announced surprised running losses from its risk management division. The US futures have dropped -0.7% in after hour’s trade and the AUD/USD risk sensitive currency is down 50 pips to 1.0050. Some fear other banks will also be carrying large undeclared losses so the broader banking sector is being sold. Looking ahead, April PPI forecast at 0.0% vs. 0.0%.
The Euro (EUR) the EUR/USD consolidated the Wednesday selloff in a tight range 1.2925 – 1.2975. The outlook is for more downside as the issues in the Eurozone fester and the stock markets struggle on slowing global growth indications.
The Japanese Yen (JPY) the USD/JPY was kept to a Y79.50 to Y80 range which is seen continuing while the two safe havens fight for top position. The Yen cross downside is continuing with EUR/JPY facing Y100 and AUD/USD looking for sub Y80 levels.
The Sterling (GBP) the BOE meeting was a non-event with rates kept at 0.5% and the QE left unchanged. The GBP/USD struggled with the bulls and bears in a fierce fight but the EUR/USD downside is likely to pull the Cable lower as EUR/GBP has fallen too fast. Looking ahead, April German CPI forecast at 0.1%. April UK PPI forecast at -1%.
Australian Dollar (AUD) the AUD/USD relief rally on the back of very strong jobs data was short lived and the downtrend has regained control focusing on 1.0000 in Asia today. The JPMorgan story has already hit the market and only the Chinese data can save the Aussie now. Looking ahead, April Chinese PPI forecast at -0.6% vs. -0.3% previously y/y. April Chinese CPI forecast at 3.3% vs. 3.6% y/y. April Chinese Industrial Output forecast at 12 vs. 11.9 previously. April Retail Sales forecast at 15.2 vs. 15.2% y/y.
Oil & Gold (XAU) the XAU/USD reversed to $1600 before falling back to $1590. OIL/USD rallied to $97.50 before once again easing back to opening levels near $96.50 with the market hesitant to trade in any fresh direction in the last few days.
