Currency Updates:
U.S. Dollar Trading (USD) markets have turned negative in recent sessions with risk off trading on Friday spilling over into Monday’s trade. Spain was once again the center of attention with concerns that the ESM would not have enough money and then later that Spain will not request aid until November. Fresh EUR/USD selling is keeping the single currency under 1.3000 and helping the Dollar remain strong. Looking ahead, September Retail Sales forecast at 0.7% vs. 0.9% previously.
The Euro (EUR) Stalling by Spain on requesting bailout money is leaving the market unsure about the next direction for the EUR/USD. Falling Yields on Spanish and Italian debt could easily have inspired a much larger rally in the EUR/USD if Spain had requested help. So far in Asia we have fallen to 1.2900 support.
The Japanese Yen (JPY) was quiet on Friday with USD strength keeping the USD/JPY close to Y78.50 resistance for most of the day. The Yen crosses are in play with EUR/JPY and AUD/JPY both nearing critical levels of Y100 and Y80 respectively.
The Sterling (GBP) found buyers under 1.6000 on Thursday and we closed with a small bounce towards 1.6050. Growing calls for further monetary stimulus (QE) from the BOE are undermining the outlook. Looking ahead, no economic data today.
Australian Dollar (AUD) the AUD/USD tried to break 1.0300 at the same time as EUR/USD attempted to break 1.3000 on Friday during the European session. Both pairs failed and we have fallen back on Friday night and Monday morning to 1.0200 on the Aussie and looking to test with multimonth lows at 1.0150. Bonds are pricing in a 80% chance of a rate cut in November after the Reserve Bank Governor noted there was plenty of scope to mitigate a slowdown in growth.
Oil & Gold (XAU) Gold has been collapsing in the last two sessions falling to $1755 on Friday and then $1740 so far in Asia today. Longer term Bulls are getting worried about the ability for buyers to absorb this amount of selling.
