Currency Updates:
U.S. Dollar Trading (USD) markets around the world bounced after 3 days of selling with bargain hunters entering into stocks and most currencies. The USD lost some strength with risk aversion eases and good economic data. Weekly Jobless Claims dropped to 366k vs. 390k forecast. In US stocks, DJIA +45 points closing at 11868, S&P +3 points closing at 1215 and NASDAQ +1 points closing at 2541. Looking ahead, November CPI forecast at 0.1% vs. 0.1% previously.
The Euro (EUR) The EUR/USD was volatile but closed above the 1.3000 level as sellers took profit and yields on Spanish and Italian debt fell back from Wednesday highs. EU inflation was confirmed at 3.0% y/y in November and Composite PMI was steady at the 47.9 up from 47.0 previously. The outlook is still weak but the small recovery was welcomed by a market suffering from selling fatigue. Looking ahead, ECB President Draghi speaks.
The Japanese Yen (JPY) USD/JPY was steady at Y77.70-Y78 range with support coming from Yen crosses as the USD weakened. EUR/JPY bounced from Y101 to Y101.50 with buyers very hesitant to buy aggressively. Weakness in the Japanese economy and export companies is expected to keep the Yen from appreciating to aggressively from here.
The Sterling (GBP) GBP/USD broke back above 1.5000 as sentiment improved in the European session. Economic data was weak with November Retail Sales falling -0.4% vs. 1.0% previously. Also CBI Industrial Orders slipped to -23 vs. -19 previously. EUR/GBP broke below 0.8400 and is stable just under the figure.
The Australian Dollar (AUD) hit new lows in Asia falling to 0.9860 before rebounding in the European session with the positive stocks and rally in Gold. AUD/USD failed to break above 1.000 and fell back later in the day for a mixed signal to the market. Going forward stock markets will be the key decider for the direction.
Oil & Gold (XAU) Gold rallied back to $1590 before falling back and closing at opening levels. Crude Oil continued to suffer from the OPEC production news falling through $95 a barrel in the US session.
