Currency Updates:
U.S. Dollar Trading (USD) the market changed direction again overnight as Eurozone debt auctions saw positive demand and Yields dropped in Spanish and Greek 10yr yields. The EUR/USD surged back to 1.2700 and was supported on rumors a bailout for Spain being discussed at the G20. Later this was denied by German officials but the market held most gains. Another large story helping US stock markets rally was growing belief the FED will do something at tomorrows FOMC meeting. Looking ahead, FOMC Meeting Statement forecast to hold rates at 0.25%. Press Conference also afterwards.
The Euro (EUR) the EUR/USD reversed back to Monday highs on the Spanish bailout/FOMC action rumors. Disappointment from either one of these will help ease the EUR/USD back to 1.2500 where it has been finding support. The Key Topside if the rally continues is at 1.2748.
The Japanese Yen (JPY) USD/JPY is under pressure from the US FOMC action talk as the US monetary policy is very important to the direction of the Asian major. EUR/JPY rallied on the back of the EUR/USD rally and is testing the key Y100 level.
The Sterling (GBP) A drop in UK CPI hurt the GBP/USD and meant most of the risk rally was missed. Resistance was seen at 1.5600 and we need to get sustained good news to help the GBP/USD resume its uptrend. EUR/GBP rallied towards 0.8080 with the Eurozone rumours helping the buyers halt the slide. Looking ahead, May German PPI forecast at -0.2% vs. 0.2%. Also UK April Unemployment rate forecast to remain at 8.2%. Also MPC minutes released June meeting forecast at 9-0 hold.
Australian Dollar (AUD) pushed to new rally highs above 1.0180 with the positive stockmarket rally helping investors surge back into the risk currency. AUD/JPY is now above Y80 and could continue to rally with Y88 year high. Looking Ahead New Zealand GDP is forecast at 1.3% vs. 1.8% previously.
Oil & Gold (XAU) Gold bucked the weak USD trend falling from $1630 to $1620oz as European bonds yields pulled back and demand for the precious metal eased. OIL/USD rallied with US stocks and is looking to rally now a base has been put in place in lower $80 levels.
