Currency Updates:
U.S. Dollar Trading (US) sentiment improved in Europe overnight sparking a major rally in global stocks. The German Constitutional court ruled Germany&rsquo s participation in the EU bailout was not unconstitutional. Also helping the markets rally is the increasing consensus the US FED will announce new easing measures to help stimulate the faltering recovery. In US stocks, DJIA +275 points closing at 11414, S& P +33 points closing at 1198 and NASDAQ +75 points closing at 2548. Looking ahead, Weekly Jobless Claims forecast at 405k vs. 409k previously.
The Euro (EUR) rallied on a combination of positive German court news and economic data. July Industrial Output at 4% vs.0.5% previously. In debt crisis news Italy and Spain are pushing through austerity budgets but the market will now look to ECB meeting and statements today. Looking ahead, ECB Rate meeting forecast to hold at 1.5%.
The Japanese Yen (JPY) the BOJ held at 0.1% and announced no new easing measures and this led to a strengthening of the Yen back to Y77.10 from Y77.60. AUD/JPY pushed higher with EUR/JPY on the positive risk appetite in the market but the next 48 hours will be critical for the outlook with the central bank meeting in Europe and G7 meetings on the weekend.
The Sterling (GBP) was the noted underperformer in the market failing to get back above 1.6000 with some weak economic data leading to more speculation that the BOE might increase the Asset purchase program at today&rsquo s MPC meeting. July Industrial Production -0.2% vs. 0.0% forecast m/m. Looking ahead, BOE Rate announcement forecast at hold at 0.5% and Asset Purchase to remain at 200bn.
The Australian Dollar (AUD) the Aussie led the global rally surging above 1.0600 after stronger than expected Q2 GDP. Q2 GDP came in at 1.2% vs. 1.0% previously. AUD/JPY broke above Y82 and could rally if the Yen weakens or intervention from the BOJ emerges after the G7. Looking ahead, August Employment Rate forecast at 5.1% vs. 5.1% previously. Employment change is forecast at 11k vs. -0.1k previously.
Oil & Gold (XAU) Gold&rsquo s volatility continued falling sharply from $1870 to $1800 before stabilizing and creeping back $1820. Crude Oil&rsquo s rally continued surging to $90 a barrel before easing back slightly into the close.
