Currency Updates:
U.S. Dollar Trading (USD) the USD enjoyed gains overnight against all currencies except the other safe haven the Japanese Yen. The buying started in Europe after weak Spanish bond auctions saw traders sell the EUR/USD and accelerated in the US session as stock losses mounted up. March ADP employment saw +209k vs. +230k previously. March ISM services fell to 56 vs. 57.3 previously. Looking ahead, Weekly Jobless Claims forecast at 355k vs. 349k previously.
The Euro (EUR) the EUR/USD fell to 1.3110 on the Spanish bond failure before finding support and staging a small recovery. The ECB held at 1.0% as widely forecast and the President Draghi was slightly hawkish talking of medium term inflation risks and the Spanish bond auction was weak on the back of bond vigilantes.
The Japanese Yen (JPY) the major was pulled down yesterday after the large falls in US stocks led to a cross sell off. EUR/JPY was the weakest down to Y108 before stabilizing. The outlook is mixed with improving US data and tightening monetary policy outlook having to fight against general risk aversion. US jobs data is ahead on Friday and will be the next key risk event.
The Sterling (GBP) the GBP/USD fell back for a second day in Europe but then took advantage of the EUR/GBP weakness to gain back its losses on Cable. The GBP/USD was the strongest currency in the market only two days ago as it recent government budget suggests it has it spending in check.Looking ahead, BOE Rate announcement forecast to hold at 0.5% and no QE expansion.
Australian Dollar (AUD) the Aussie fell back in Asia on weak Trade data and then risk aversion in Europe saw fresh month and year lows. February Trade balance -480mn vs. -1000mn previously. The AUD/USD is in a firm downtrend but is still providing plenty of two way action each day.
Oil & Gold (XAU) Gold fell back for a second day falling on USD strength before finding support near $1610. Oil crashed to $101 fresh multimonth lows before bouncing back above $102.
