Daily outlook – 21st June 2012 (00:30GMT)

The US dollar (USD) provided mixed signals versus a basket of currencies following the Federal Open Market Committee (FOMC) statement. The Federal Reserve decided to extend its monetary stimulus via Operation Twist trying to keep the US recovery from stalling. Even though this scenario was expected by investors, there was some disappointment as many anticipated a more aggressive stance towards the economic challenges.

The euro (EUR) recorded gains against most of its major counterparts as positive developments from Greece hit the newswires. Early in the US session, the New Democracy party leader Antonis Samaras was reported to have sworn as Prime Minister. This was well received by market participants, however skepticism still remains on how the new coalition government plans to renegotiate the bailout terms and put Greece back on track. Versus the Australian dollar (AUD), the single currency dropped to 1.2435 from 1.2454.

The British pound (GBP) had a very volatile session versus the US dollar, opening at 1.5720, recording a daily high at 1.5777 and a daily low at 1.5650, before it closed at 1.5705. This was on the back of the minutes revealed from the last Monetary Policy Committee (MPC) meeting. Apparently, the Bank of England (BoE) had a split 5-4 voting against additional asset purchase, with the Governor Mervyn King on the minority.

Oil prices plunged to 80.72 from 83.97 dollars a barrel. Gold (XAU) dropped to 1604.28 from 1620.61 US dollars an ounce. Against the euro, gold dived to 1265.04 from 1275.82 euro an ounce. Silver (XAG) down to 28.0035 from 28.4532 dollars an ounce.