Currency Updates:
U.S. Dollar Trading (USD) the dollar soared overnight as the April ISM came in better than expected and we saw stocks hit multi year highs in the US session and the US Dollar strength. The USD/JPY was notable breaking back above Y80 and is being watched closely in Asia today. Looking ahead, April ADP Employment Report forecast at 177k vs. 209k previously. Also tonight, March Factory Orders forecast at -1.6% vs. 1.3% previously.
The Euro (EUR) the EUR/USD hit fresh multi week highs above 1.3280 but quickly reversed as the USD gained post the surprise ISM data in the US session. The outlook is mixed with the Eurozone debt crisis not grabbing attention as it once did and allowing the stock market rally to encourage Euro buying. EUR/JPY is quite low still as the USD/JPY struggles and is quite attractive at these levels.
The Japanese Yen (JPY) the USD/JPY rallied back above the key psychological level of Y80 in the US session with the positive ISM data helping reverse the heavy selling. Crosses were mixed with AUD/JPY dipping then reversing in the US session and the GBP/JPY able to break back above Y130.
The Sterling (GBP) The GBP/USD reacted to the USD buying with a brief test under 1.6200 but has been very resilient lately and quickly returned to the upside bias. The EUR/GBP is getting attention as a quiet range trading option. Many traders are looking to sell on the rally close or above 0.8200 for an eventual move to 0.8000. Looking ahead, April German Unemployment Change forecast at -10k vs. -18k previously.
Australian Dollar (AUD) the AUD/USD was sharply lower in Asia after the RBA cut rates by 0.5% vs. 0.25% expected to 3.75%. The AUD/USD found support at 1.0300 and was able to rally to 1.0350 later in the day. UPDATE CHINA HSBC PMI at 49.3 vs. 49.1 slightly previously.
Oil & Gold (XAU) Gold was volatile overnight falling from $1670 to below $1660 quickly after the positive US data. The outlook for the precious metal is mixed with tonight’s ADP report offering clues for Fridays NFP. OIL/USD finally broke above $105 and is well positioned to push higher now.
