Currency Updates:
U.S. Dollar Trading (USD) was under pressure as the market sold on concerns about US debt and weak US data. April Industrial Output at 0.7% vs. 0.8% m/m. April Housing Starts at 523k vs. 589k previously in a disappointing print. In US stocks, DJIA -68 points closing at 12479, S& P -1 points closing at 1328 and NASDAQ +1 points closing at 2783. Looking ahead, Weekly Crude Oil Inventories forecast at 1.4m vs. 3.8m previously.
The Euro (EUR) The Euro spent most of the day in quiet trade but ended on a strong note with USD weakness across the board. The German ZEW current conditions improved to 91.5 vs. 87.5 forecast. The outcome for Greece& rsquo s debt crisis is still creating uncertainty. Overall the EUR/USD traded with a low of 1.4120 and a high of 1.4275 before closing the day around 1.4240 in the New York session.
The Japanese Yen (JPY) the Yen had a very weak day with the market latching on to comments from a Japanese Official that the economy was in a & lsquo severe& rsquo state post-earthquake. Crosses led by GBP/JPY all moved higher. Overall the USD/JPY traded with a low of 80.820 and a high of 81.78 before closing the day around 81.40 in the New York session.
The Sterling (GBP) was the strongest currency in the market after April CPI surprised to the upside. April CPI printed 4.5% vs. 4.1% previously. Retail Sales were less impressive at 5.2% y/y vs. 5/3% previously. The market latched onto the high CPI numbers with expectations of BOE rate hikes being brought forward. Overall the GBP/USD traded with a low of 1.6173 and a high of 1.6305 before closing the day at 1.6250 in the New York session. Looking ahead, May BOE Minutes. Also April Claimant Count forecast at 0k vs. 0.7k previously.
The Australian Dollar (AUD) the market sold off aggressively towards the 1.0500 before bouncing in the US session to above 1.0600 and finishing well supported. RBA Minutes showed that the central bank was already factoring more rate rises when the economy was ready to help slow inflation. Overall the AUD/USD traded with a low of 1.0504 and a high of 1.0640 before closing the day at 1.0625 in the New York session. UPDATE Q1 WPI at 0.8% vs. 1.0% previously.
Oil & Gold (XAU) Gold was on the weaker side overnight falling to $1470 before finding support and grinding higher. Overall trading with a low of USD$1471 and high of USD $1498 before ending the New York session at USD$1487 an ounce. Oil tested $95 before returning to opening levels in mixed trade. The outlook is cautious and more range trading is expected. WTI Oil Closed -$0.46 at $96.90 a barrel.
