Currency Updates:
U.S. Dollar Trading (USD) the Dollar was sold across the board overnight with stocks and commodities all enjoying large gains. Sentiment began to improve in Asia with China announcing large liquidity measures and the rally overflowed into Europe where the tough Spanish budget got applause from investors. Looking ahead, September Chicago PMI forecast at 53 vs. 53 previously. August Personal Income forecast at 0.2% vs. 0.3%.
The Euro (EUR) the EUR/USD was volatile falling to 1.2840 in the US session before surging as traders embraced the proposed Spanish budget reforms. The major broke above 1.2900 and is still well supported in Asia on Friday sitting at 1.2930 and waiting for the release of Spanish Banking Audit.
The Japanese Yen (JPY) the USD/JPY is pressuring the lows to Y77.50 and is threatening to break lower and test Y77 if the USD continues to be sold. Official Jawboning is continuing with the finance minister expected to talk about the Yen strength at the next G7 meeting.
The Sterling (GBP) the GBP/USD gains but couldn’t match the speed of the EUR/USD and closed above 1.6200. EUR/GBP rallied up to 0.7950 and is a good pair to watch for genuine strength. Looking ahead, August German Retail Sales forecast at 0.6% vs. 0.3% previously.
Australian Dollar (AUD) the AUD/USD has enjoyed solid gains back above 1.0400 and closing at 1.0450 as risk appetite picks up and Gold and Oil surge higher. The next big risk event is the weekend release of China’s HSBC PMI. Looking ahead, HSBC PMI previously at 47.8.
Oil & Gold (XAU) Gold surged from $1750 to $1780 in a very bullish day of trade with $1800 squarely back in view. OIL/USD was strong climbing $2 a barrel to $92.50.
