Currency Updates:
U.S. Dollar Trading (USD) in a dramatic rally given the relative stability in recent days, stocks rallied over 300 points in the US and risk was firmly ‘on’ throughout the day. November Housing Starts jumped to 0.685mn vs. 0.627mn previously. In US stocks, DJIA +337 points closing at 12103, S&P +35 points closing at 1241 and NASDAQ +80 points closing at 2603. Looking ahead, November Existing Home Sales forecast at 5.05mn vs. 4.97mn previously.
The Euro (EUR) the market was caught short yesterday with a positive Spanish bond auction the catalyst for a surge to 1.3180 in Europe. Today the ECB will launch a new lending facility that may further decrease pressure on European banks and Sovereign bonds and encourage the market to further gains. December German IFO at 107.2 vs. 106 forecast. Looking ahead, December Consumer Confidence previously at -20.4.
The Japanese Yen (JPY) USD/JPY fell back as the USD came under heavy selling pressure. Support was found at Y77.70 so the move was small but still disappointing for those looking for a breakout of the recent range to the topside. The 50 pip range has held for nearly 3 weeks now. AUD/JPY and EUR/JPY surged with stocks and risk appetite.
The Sterling (GBP) outperformed in a very positive trading session breaking to test 1.5700 before consolidating at 1.5660. EUR/GBP fell even further and was an example of how strong the Pound move was given the positive Euro news. December CBI Distributive Trades surged to 9 vs. -19 previously a seven month high. Looking ahead, MPC minutes from December meeting forecast at 0-9-0.
The Australian Dollar (AUD) the Aussie was the back overnight breaking above 1.0000 and surging to 1.0100 after opening under 0.9900 in Asia. The risk currency was supported by RBA minutes which suggest the December rate cut was only a precaution given the European downside risk and that economic data in Australia did not support it. The outlook is linked to stocks and if gains continue then 1.0250 resistance will come into view.
Oil & Gold (XAU) Gold broke above $1600 and went $1618 as the topside was tested and the USD weakened broadly. Crude Oil Surged to $97 after breaking above $95 and commodities tracked stocks higher.
