Currency Updates:
U.S. Dollar Trading (USD) the positive mood seen was undone as US stocks slumped dramatically. In the biggest one day fall since June we saw the Dow Jones down over 200 points and the Nasdaq down over 2%. The main catalysts for the move lower were disappointing company earnings and a lack of progress at the EU summit. Looking ahead, FOMC Member Pianalto Speaks.
The Euro (EUR) the EUR/USD held up better than most as the mood soured on Friday with the single currency able to hold above 1.3000 and remain bullish technically. Buyers will quickly need to reclaim control of the major with a break and hold below 1.3000 potentially leading to more selling. The lack of progress made at the EU summit while not surprising is putting a lid on the upside for now.
The Japanese Yen (JPY) USD/JPY remained strong near recent highs at Y79.50 with investors remaining bullish on the assumption the US economy will outpace Japan. The Yen crosses were mixed with the EUR/JPY and AUD/JPY both falling sharply as the recent rally was wound back.
The Sterling (GBP) GBP/USD has fallen back to 1.6000 and is under pressure with the risk sensitive pair tracking US stocks lower. There is some concern that the MPC could expand the BOE asset purchase program to help a faltering recovery and this is putting pressure on the Pound as well. Looking ahead, No economic data today.
Australian Dollar (AUD) AUD/USD reversed from 1.0400 as stocks and commodities crashed on Friday. The resurgence of the Aussie last week caught traders off guard with the recent RBA rate cuts not yet leading to substantial AUD weakness. Looking ahead, Japanese Trade Balance forecast at -0.75T vs. -0.47T previously.
Oil & Gold (XAU) Gold crashed lower on Friday breaking through key technical support at $1730 and remains under pressure in Asia Monday. OIL/USD reversed below $90 a barrel as support evaporated.
