Currency Updates:
U.S. Dollar Trading (US) was on the front foot as mild risk aversion spread throughout the market and the EUR/USD slumped in a delayed reaction to the Portugal downgrade the night before. June ISM Services dropped to 53.3 vs. 54.6 previously. China also increased Interest rates but stock markets were able to end slightly higher in the US. In US stocks, DJIA +56 points closing at 12626, S& P +1 points closing at 1339 and NASDAQ +8 points closing at 2834. Looking ahead, Weekly Jobless Claims forecast at 421k vs. 428k previously. June ADP employment forecast at 67k vs. 38k previously.
The Euro (EUR) was under pressure as Europe reacted to the Portugal downgrade the night before in the US session. The major plummeted to 1.4300 but support was found and consolidated ahead of todays expected rate rise from the ECB. Overall the EUR/USD traded with a low of 1.4285 and a high of 1.4468 before closing the day around 1.4325 in the New York session. Looking ahead, ECB Rate forecast to rise 0.25% to 1.5% vs. 1.25% previously. Focus on Trichet&rsquo s Press Conference 45mins after announcement.
The Japanese Yen (JPY) step down just under Y81 but kept to a 20 pip range with all the action on the crosses. EUR/JPY led the rest down below Y116 before consolidating. GBP/JPY is once again back under Y130 with sentiment still very sour towards the risk sensitive cross. Overall the USD/JPY traded with a low of 80.75 and a high of 81.11 before closing the day around 80.85 in the New York session.
The Sterling (GBP) was pushed lower under the weight of heavy Euro selling and broke below 1.6000. EUR/GBP still fell however as the Pound outperformed the single currency and could pull back further if Trichet is dovish tonight. Overall the GBP/USD traded with a low of 1.5945 and a high of 1.6093 before closing the day at 1.5995 in the New York session. Looking ahead, BOE Rate announcement forecast at 0.5%.
The Australian Dollar (AUD) range traded for most of the day under pressure due to the Euro led USD strength and China rate hike but supported from strong Gold and US stocks which ignored the negative news. Overall the AUD/USD traded with a low of 1.0653 and a high of 1.0735 before closing the day at 1.0690 in the New York session. UPDATE JUNE EMPLOYMENT Very Strong at 23.4k vs. 7.8k previously.
Oil & Gold (XAU) Gold pushed higher with the resurgence of sovereign debt risk in Europe. Overall trading with a low of USD$1510 and high of USD $1534 before ending the New York session at USD$1529 an ounce. Oil found support on a dip to $96 before ending unchanged. WTI Oil Closed -$0.05 at $96.80 a barrel.
