Currency Updates:
U.S. Dollar Trading (USD) USD strength from Friday continued throughout Monday with heavy EUR/USD selling pushing the single currency below 1.2800. G20 Finance Ministers met in Mexico and we heard concerns about the coming fiscal cliff in the in 2013. US elections are today and could move the market with an Obama victory seen keeping pressure on the USD. Looking ahead, US Presidential Elections.
The Euro (EUR) the EUR/USD failed to bounce from Friday lows and we saw continued selling of the major throughout the day. Support was found less than 1.2800 and we settled into a tight range. Delays to Greece’s aid until later this month are adding to the Euro downside. Spain officials are trying to delay asking for Bond Buying assistance while the EU discusses the costs and oversight.
The Japanese Yen (JPY) the USD/JPY opened at Y80.50 before easing back to Y80.20 and remaining steady for the rest of the day. EUR/JPY dragged lower with the uncertainty over the future of Greece and Spain inspiring a move back below Y103. The US elections are sure to have an impact with Obama expected to win at the time of writing.
The Sterling (GBP) GBP/USD was pushed back below 1.6000 after UK Services PMI fell to 50.6 vs. 52 previously. EUR/GBP pivoted the 0.8000 level with the GBP and Euro losses roughly at the same pace. There is some focus on who will replace the BOE Governor King and whether they will affect the monetary policy and Asset purchase program. Looking ahead, UK September Industrial Output forecast at -0.6% vs. -0.5%. EU October PMI Services forecast at 46.2.
Australian Dollar (AUD) the main currency in play today with the central bank of Australia (RBA) meeting and forecast to cut by 0.25%. It is a very close call though and a hold would not be a major surprise to the market. Strong US stocks and local Australian Data helped underpin the AUD/USD and we moved back to 1.0380. September Retail Sales came in strong at 0.5% vs. 0.4% forecast m/m. Looking ahead, RBA Rate Decision forecast at 3% vs. 3.25%.
Oil & Gold (XAU) XAU/USD found support at $1680 with a small bounce in Asia so far. OIL/USD stabilized under $85 before bouncing in the US session back to $86. The recent downtrend on OIL/USD has led the market lower due to concerns about Global growth going forward.
