Currency Updates:
U.S. Dollar Trading (USD) the dollar was able to fund support overnight after S& P downgraded Japan and stock markets stalled. Weekly Jobless Claims were weak jumping to 454k vs. 405k forecast and Durable Goods also fell -2.5% in December. In US stocks, DJIA +4 points closing at 11989, S& P +3 points closing at 1299 and NASDAQ +15 points closing at 2755. Looking ahead, Q4 GDP forecast at 3.5% vs. 2.6% previously Q/Q.
The Euro (EUR) pushed higher into the 1.3700 region as sentiment towards the single currency continues to improve with traders noticing CEB& rsquo s Bini-Smaghi comments that the recent rise in inflation is hard to ignore. EUR/USD traded with a low of 1.3635 and a high of 1.3760 before closing at 1.3730. Looking ahead, December M3 Money Growth forecast at 2% vs. 1.9% previously.
The Japanese Yen (JPY) was a big mover yesterday as S& P downgraded Japan to AA- on the back of a & lsquo lack of a coherent strategy& rsquo to deal with their debt situation. USD/JPY moved from Y82 to Y83 very quickly before consolidating the move for the rest of the session. Overall the USDJPY traded with a low of 82.00 and a high of 83.23 before closing the day around 82.75 in the New York session.
The Sterling (GBP) pushed towards 1.6000 before reversing into the close on USD strength and market wide profit taking. GBP/JPY was boosted by the Japanese downgrade and is well positioned for further upside. Overall the GBP/USD traded with a low of 1.5878 and a high of 1.5994 before closing the day at 1.5930 in the New York session.
The Australian Dollar (AUD) was hurt by the Japanese Downgrade and pullback in Gold overnight falling below 0.9900 after testing parity in Asia. Also weighing on the Aussie was the proposed flood levy announced yesterday but the Federal government. Overall the AUD/USD traded with a low of 0.9873 and a high of 1.0003 before closing the US session at 0.9915.
Oil & Gold (XAU) continued to find heavy selling pressure in the US session on further liquidation from investors. Overall trading with a low of USD$1310 and high of USD $1348 before ending the New York session at USD$1315 an ounce. Oil& rsquo s volatility continued down towards the key $85 level. WTI Oil Closed -$1.69 at $85.60 a barrel.
