Currency Updates:
U.S. Dollar Trading (USD) the ‘risk on’ mood continued Friday with stocks gaining for a 4th day even as economic data was mixed. Q1 GDP fell to 2.2% vs. 3.0% previously but stocks did not take this too negatively in fact it supports the view that the FED will keep monetary policy in the US loose for an extended period of time. Looking ahead, March Personal Income forecast at 0.3% vs. 0.2% previously.
The Euro (EUR) the EUR/USD fell going into the European session as the Spanish downgrade pushed the EUR/USD to 1.3160. The positive stock market rally and the weak US GDP helped lift the major to 1.3270 before consolidating the gains into the weekend. The outlook is positive with the Eurozone debt crisis failing to cause the usual selling. The Spanish Unemployment rate is continuing to soar up to 24.4% in Q1.
The Japanese Yen (JPY) the USD/JPY was under pressure towards Y80 as the weak US data affected the major negatively. Expectations are for further government verbal intervention close to Y80 and underneath to grow louder. The outlook is for more ranging but crosses are expected to do well.
The Sterling (GBP) the GBP/USD surged higher towards 1.6300 in the US session with another week of gains adding to the uptrend technically. The EUR/GBP is easing towards 0.8100 at a slow but steady pace. Also ahead, March EU Retail Prices forecast at 0.5% vs. 1.7% previously.
Australian Dollar (AUD) the AUD/USD is defying the fundamental news and expected direction of a currency that is heading into an Interest Rate meeting where there is expected to be a rate cut. The RBA meeting tomorrow could see a 0.5% cut as calls from local exporters and retailers grow louder. Strong resistance is seen at 1.0500.
Oil & Gold (XAU) Gold moved higher to the next technical level at $1663 as the USD weakness encouraged buyers to get more aggressive on Friday. OIL/USD was strong but failed to break the psychological resistance at $105 a barrel instead closing just under the level.
