Currency Updates:
U.S. Dollar Trading (USD) weak Chinese GDP on Friday inspired risk off selling which turned into a Global stockmarket sell off. Adding to the fears was the European debt crisis returning via Spanish debt which climbed back above 6%. The US Consumer Sentiment index fell slightly as well to 75.7 vs. 76.2 previously. Looking ahead, April NY FED Manufacturing forecast at 18mil vs. 20mil previously. Also March Retail Sales forecast at 0.4% vs. 1.1% previously.
The Euro (EUR) the EUR/USD is approaching 1.3000 and the key level may break this time with Spanish debt continue to fall in value. The concern on Friday was that Spanish banks were holding too much of the debt and that a coming recession in Spain will pressure the Spanish banks via real estate loan defaults. Suggestions emerged over the weekend asking for more money into the ECB bond buying program but politic strains especially in France and Germany are going to make this more and more difficult.
The Japanese Yen (JPY) the USD/JPY was caught by risk off selling on the crosses but did not fall much as the USD also strengthened and the BOJ tried to talk down the Yen. The Y80 level is close and the natural target for sellers and noted support.
The Sterling (GBP) the GBP/USD was not immune to the safe haven flows of USD buying and we saw a move to 1.5850. EUR/GBP has broken 0.8230 and is grinding to 0.8200 taking advantage of the Euro weakness to make a push at the critical level. March PPI came in hot at 4.1% vs. 3.6% forecast y/y. Looking ahead, February Trade Balance forecast at 18bn vs. 20.2bn previously.
Australian Dollar (AUD) the AUD/USD is being crunched lower as stock markets fall and the Chinese economy slows down faster than expected. The market is eyeing month lows new 1.0200 and then on to 1.000 if the risk off trading environment continues. Last year the market took the Aussie to 0.9500 at the height of the European Debt Crisis Fear.
Oil & Gold (XAU) Gold was dragged lower as the USD strength outpaced safe haven demand from riskier government debt. The outlook is mixed with Gold strength better expressed against the Euro going forward.Oil came under pressure as China GDP slowed and Iran started talks with the West over the weekend.
