Currency Updates:
U.S. Dollar Trading (US) the market was in two minds yesterday with stocks rallying and supporting the USD with a sharp pullback in Gold. An increase in 10yr US Treasury yields on tempering expectations from Bernanke& rsquo s speech on Friday is also supporting the Dollar. Data was good with July Durable Goods Orders jumping 4.0% m/m vs. 2.1% previously. In US stocks on Friday, DJIA +143 points closing at 11320, S& P +15 points closing at 1177 and NASDAQ +21 points closing at 2467. Looking ahead, Weekly Jobless Claims forecast at 405k vs. 408k previously.
The Euro (EUR) a rally into Europe failed to hold onto gains and the market finished at 1.4400 in a very mild trading day ahead of Bernanke& rsquo s speech on Friday. August German IFO slipped to 108.7 vs. 112.9 previously. June EU industrial Orders fell -0.7% vs. +3.6% in May. Looking ahead, September Gfk forecast at 5.2 vs. 5.4 previously.
The Japanese Yen (JPY) USD strength and good US data sent the USD/JPY to the top of its recent range at Y77 but this level has held so far. The outlook is still very mixed although the down trend has been stopped by the 2 week support found at Y76.50.
The Sterling (GBP) there was little interest to push higher in Europe with resistance above 1.6500 proving solid before the market pushed lower under 1.6400. USD strength countered the improving risk appetite with GBP/JPY now the preferred option for risk takers.
The Australian Dollar (AUD) the Aussie was very subdued with the risk currency remaining well supported even with a sharp fall in gold. 1.0500 is proving a key pivot in the recent days with little interest to push either side. AUD/JPY is doing well as USD/JPY moved higher.
Oil & Gold (XAU) Gold crashed for a second day down over $100oz with long positions were squeezed out. Crude Oil remained subdued but supported on strong US data above $85 a barrel.
