Currency Updates:
U.S. Dollar Trading (US) with the initial shock of the potential Greece default wearing off most markets rallied softly throughout the day. Helping support was comments from Germany& rsquo s Merkel that Greece would meet requirements for further aid and talk that the ECB was buying Italian bonds in the market. US Import prices down -0.4% vs. 0.0% forecast. In US stocks, DJIA +44 points closing at 11105, S& P +10 points closing at 1172 and NASDAQ +37 points closing at 2532. Looking ahead, August Retail Sales forecast at 0.2% vs. 0.5% previously.
The Euro (EUR) was supported from positive expectations from the EU finance ministers meeting later in the week with talk US Treasury Secretary Geithner will be attending and he will press for an increase in the EFSF bailout fund. Also talk that China and the other BRIC& rsquo s may look to invest in European bonds. Looking ahead, July Industrial production forecast at 1.5% vs. 0.7% previously.
The Japanese Yen (JPY) was very contained ending slightly stronger against the USD but unchanged against the Euro after the cross found support under Y105. The USD/JPY range trading around the Y77 level is offering traders a fairly safe trading option away from the volatility of the majors. Looking ahead, July Japanese Industrial Output is forecast at 0.6%.
The Sterling (GBP) was under pressure in Europe falling to month lows under 1.5800 before finding support and grinding higher. The outlook is bearish with a crisis in the Eurozone seen hitting its neighbor the hardest going forward. Looking forward, August CPI increased to 4.5% vs. 4.4% previously.
The Australian Dollar (AUD) the Aussie underperformed as the usually well supported currency remaining on the backfoot with traders sitting on the sidelines watching the EU debt saga unfold. The potential for a banking crisis and the subsequent heavy selling that would cause in the AUD/USD is keeping buying timid. UPDATE September Westpac Consumer sentiment +8.1% vs. -3.5% previously.
Oil & Gold (XAU) Gold dipped below $1800 and then bounced sharply in the US session on safe haven demand and weaker USD. Crude continue to outperform breaking above the key $90 level before consolidating.
