Currency Updates:
U.S. Dollar Trading (USD) the Dollar had a mixed day with the European and UK currencies enjoying good gains while the Yen and Gold were under heavy selling pressure. Chicago PMI was strong at 55.6 vs. 50.5 forecast and help spark a Yen cross rally which allowed the USD/JPY to hit fresh highs above Y92. Looking ahead, January NonFarm Payrolls forecast at 161k vs. 155k previously. The Unemployment Rate is forecast unchanged at 7.8%.
The Euro (EUR) the Euro broke higher in late New York trade with new trend highs in Asia above 1.3600. The market is overbought but the trend is strong and there seems to be little concern from the European officials at the recent rise across the board for the Euro.
The Japanese Yen (JPY) was sold aggressively across the board in waves of selling for the last 24 hours hitting trend highs against the USD, EUR and GBP. USD/JPY has tested Y92 in Asia trade ahead of the Key nonfarm payrolls tonight. EUR/JPY while heavily overbought is showing no signs of slowing down breaking above Y125 easily overnight.
The Sterling (GBP) did well in a market caught short on the cable taking advantage of the USD weakness and tracking the EUR/USD rally. Resistance was found at 1.5880 and we consolidated for the rest of the session and throughout Asia on Friday. Looking ahead, UK January Manufacturing PMI forecast at 51.0 vs. 51.4 previously.
Australian Dollar (AUD) the AUD continued to underperform overnight with selling once again selling into a small rally inspired by strong AUD/JPY buying and EUR/USD moves higher. The main reason for the underperformance has been strong cross buying on the EUR/AUD and GBP/AUD which have been enjoying solid gains this week. EUR/AUD hit 1.3100 and up from1.2400 at the start of January. Update Q4 PPI at 0.2% vs. 0.6% previously q/q.
Oil & Gold (XAU) Gold fell from the $1675 handle in a technically damaging day for the precious metal. Buyers of Gold after the US GDP have been disappointed and the sharp selling over the last two days has put the bears back in control. OIL/USD continues to be supported on ME tensions and strong risk appetite but fell slightly to profit taking overnight.
