The Dollar was mixed gaining against the other safe havens in the Japanese Yen but falling against the Euro and commodities. Weekly Jobless Claims surprised at 339k vs. 370k previously and helped keep U.S. stocks positive. Looking ahead, U.S. PPI is forecast at 0.7% vs. 1.7% previously. Also October UoM Consumer Sentiment forecast at 78 vs. 78.3 previously. IMF meetings all day.
The Euro (EUR) the EUR/USD staged a small rally but found resistance near 1.2950 and eased back slightly. Speculation emerged that Spain may wait weeks or months before asking for Aid. Greece talks are still ongoing but they are believed to be close to a budget deal and this could support the Euro. The Sterling (GBP) grinded higher to 1.6050 as risk appetite improved but we could still see the downside tested if Global stock markets pullback or the Euro-zone crisis flares up again via Spanish brinkmanship. EUR/GBP is holding above 0.8000 but is closely watched for pure Euro strength or weakness.
The Japanese Yen (JPY) USD/JPY popped higher as the weekly jobless claims dropped dramatically in what may be a statistically anomaly. Resistance was found above Y78.50 and we have eased back slightly since with EUR/JPY and AUD/JPY selling weighing on the major. The G7 meeting has seen some focus on Yen strength with the Japanese Economic Minister stating overnight that ‘Japan may intervene in the FX markets alone’ without the US consent. Australian Dollar (AUD) the AUD/USD enjoyed gains yesterday as September Jobs reports showed more jobs were made last month than forecasted. The Unemployment Rate however did jump to 5.4% vs. 5.1% as more people returned to the labor market. Resistance was found at 1.0300 and the AUD/USD has been under pressure with the downtrend still in play. Looking ahead, BOJ Governor Shirakawa Speaks.
Oil & Gold (XAU) Gold was strong gaining $10oz back to $1770. Oil gained on the USD weakness back above the $92 a barrel level. The outlook for most commodities is quite strong given the very loose monetary policies around the world.
Pairs To Watch
- USD/JPY Japanese intervene or just talk?
- EUR/USD can we retest 1.3000 or Spanish bailout needed first?
