Currency Updates:
U.S. Dollar Trading (USD) the EUR/USD short Squeeze failed to kick on in the European and US sessions yesterday and we found ourselves back at 1.3050 in Asian trade Friday. The outlook is mixed with the USD strong across the board after stronger than forecast economic data. US Preliminary GDP came in at 0.1% vs. -0.1% previously. Chicago PMI came in 56.8 vs. 54.3 forecast. Finally Weekly Jobless Claims came in at 344k vs. 260k forecast. Looking ahead, February Manufacturing ISM forecast at 52.5 vs. 53.1 previously. Fed Chairman Bernanke Speaks.
The Euro (EUR) the EUR/USD reversal yesterday has put the focus back on the downside with the 1.3000 big support level just below the 1.3050 closing levels. The market is suffering under the broad USD rally and the recent downtrend in the major. The EUR/JPY is dominating the headlines and charts of most traders with lots of daily movement and potential both way action.
The Japanese Yen (JPY) the USD/JPY is benefitting from strength in the USD and ongoing expectations that the Japanese will continue with easy monetary policy. The Yen crosses are suffering however from the weakness in the majors with AUD/JPY and GBP/JPY especially weak. The BOJ Governors have been officially nominated with Kuroda as Governor and Iwata as deputy.
The Sterling (GBP) the GBP/USD was quiet but well supported by EUR/GBP selling which fell back to 0.8600 by the end of the trading day. Cable has been grinding higher and testing 1.5200 twice this week and a third attempt may see the struggling Pound get some rare topside momentum. Looking ahead, February PMI manufacturing forecast at 51 vs. 50.8 previously. Looking ahead, mortgage approvals forecast at 56.5 vs. 55.8. February EU PMI forecast at 47.8 vs. 47.8 previously.
Australian Dollar (AUD) the AUD/USD soared to 1.2080 after the CAPEX data showed mining data was stronger than forecast defying pessimist predictions of a crash in investment. The AUD/USD rally was briefly however as USD strength and technical resistance held strong and we ended back at the 1.0225 support level. Update Chinese PMI at 50.1 vs. 50.2 forecast.
Oil & Gold (XAU) Gold was sold for a second day in a worrying sign for the bulls caught long after the recent break above $1600oz. USD strength and persistently strong US data has seen a change in sentiment towards Gold. OIL/USD was sold aggressively form $93 to $91.50 supports as the US stocks fell late on US budget gridlock concerns.
