Currency Updates:
U.S. Dollar Trading (USD) stocks went up but finished unchanged overnight with a small rally undone in late hours. Some ratings downgrades in Europe continued to put a dampener on the whole market. US Inflation was slightly lower than expected at 0.0% m/m in November. In US stocks, DJIA -2 points closing at 11866, S&P +3 points closing at 1219 and NASDAQ +14 points closing at 2555. Looking ahead, December NAHB Housing Market Index forecast at 20 vs. 20 previously.
The Euro (EUR) the EUR/USD enjoy a brief rally to 1.3080 but this was wound back after Rating agencies continued to warn European countries with downgrades if the debt crisis continued. Belgium was downgraded after the close but this had little effect on the Euro trade. October EU Trade Balance fell to 0.3bn vs. 2.2 bn previously. Looking ahead, Current Account forecast at -2bn vs. -2.5bn previously.
The Japanese Yen (JPY) The USD/JPY stayed inside the tight range with little action or reason to break either side. EUR/JPY was more volatile pivoting the Y101.50 level and finishing near lows. The outlook for most crosses is linked to stock markets and the ongoing EU debt crisis. If confidence continues to fall then the Yen should appreciate further.
The Sterling (GBP) kept to a 50 pip trading range for a very stable trading day. EUR/GBP selling is continuing to support with the important cross now broken out of multi month range to the downside. GBP/USD will track the EUR/USD broadly however and the potential for more downside is still very evident.
The Australian Dollar (AUD) AUD/USD popped above 1.0000 briefly in the European session but this was quickly reversed and we saw the pair trade towards 0.9960 in late US weakness. The outlook is negative as the RBA cuts rates and Chinese growth is questioned and stock markets globally struggle. Stronger support is seen at 0.9850 and then 0.9600.
Oil & Gold (XAU) Gold finished close to $1600 testing the big figure resistance throughout the day but failing to break higher. Crude Oil tested $93 as the slide continued but then bounced and is very oversold technically.
