Currency Updates:
U.S. Dollar Trading (USD) the market broke out of its recent range to the downside with stocks and most currencies plunging on fresh risk aversion. News that North Korea had shelled a South Korean Island and killed military personal and wounded civilians sent stocks falling sharply. FOMC Minutes also released were bearish as the FED downgraded Unemployment forecasts. In US stocks, DJIA -142 points closing at 11115, S& P -17 points closing at 1180 and NASDAQ -37 points closing at 2494. Looking ahead, Weekly Jobless Claims are forecast at 434k vs. 439k previously. October Durable Goods are forecast at +0.2% vs. 3.5% m/m previously.
The Euro (EUR) focus on Ireland continued with German Chancellor Merkel saying the Euro is in an & lsquo exceptionally serious& rsquo situation. German GDP was confirmed at 0.7% Q/Q. EUR/USD continued to be under pressure falling over two big figures on debt contagion fears. EUR/USD traded with a low of 1.3360 and a high of 1.3616 before closing at 1.3385. Looking ahead, November German IFO Business Climate is forecast at 107.4 vs. 107.6 previously.
The Japanese Yen (JPY) reacted to the North Korean news spiking higher before general risk aversion sent the USD/JPY and crosses heavily lower. AUD/JPY fell below Y81 and EUR/JPY fell below Y111 at one stage before stabilizing. The Yen could be sold heavily if the Korean situation gets worse. Overall the USDJPY traded with a low of 82.77 and a high of 83.87 before closing the day around 83.20 in the New York session.
The Sterling (GBP) Broke through multiple supports on its way down to low 1.5760 lows on a combination of the North Korean attack news and English bank exposure to Irish debt. Below 1.5800 the market is in danger of falling further as the recent uptrend unwinds. Overall the GBP/USD traded with a low of 1.5757 and a high of 1.5957 before closing the day at 1.5780 in the New York session.
The Australian Dollar (AUD) broke below the recent trading range low and fell quickly to 0.9710 as the risk sensitive currency reacted to the negative news and stocks. AUD/JPY selling could continue as the market has been quite long on this important cross in recent months. Overall the AUD/USD traded with a low of 0.9706 and a high of 0.9884 before closing the US session at 0.9745.
Oil & Gold (XAU) Gold surged higher on Sovereign debt concerns and fresh Korean tensions. Overall trading with a low of USD$1355 and high of USD $1383 before ending the New York session at USD$1375 an ounce. Oil dropped testing $80 but held firm before recovering into the close. WTI Oil Closed -$0.30 at $81.00 a barrel.
