U.S. Dollar Trading (USD) enjoyed the continued pullback in global markets, higher against all currencies except the Yen. June TICS flows jumped 90bn vs 17bn forecast as foreign investors poured into US Treasury Bonds. Commodities continued to slide tracking the general mood in the market although a bounce into the US session kept prices well off lows. Crude Oil Closed down $0.76 at $66.75. In US share markets, S&P ended -24.36 points (-2.43%) at 979, NASDAQ ended -54 points (-2.75%) at 1930 and DOW JONES ended -186 points (-2.00%) at 9135. Looking ahead, July Build Permits forecast at 0.58m vs. 0.57m and Housing starts forecast at 0.6m vs. 0.582m previously. Also released July PPI Forecast at -0.3% vs. 1.8% m/m. July Core PPI forecast at 0.1% vs 0.5% m/m.

The Euro (EUR) started falling from the open and accelerated into Europe after breaking through 1.4100. The Market found itself short going into New York and stabilized through a rally in EUR/JPY. The market now is poised for a test of the big 1.4000 level if the downside momentum continues over the next 24 hours. June Trade Balance 1.0Bn vs. 1.4bn forecast. Overall the EUR/USD traded with a low of 1.4046 and a high of 1.4203 before closing at 1.4080 Looking ahead, August ZEW Current Conditions forecast at -85 vs. -89 previously.

The Japanese Yen (JPY) was the strongest currency as the safe haven of choice was bought when stocks extended losses. The USD/JPY held up very well with large buying below 94.50 discouraging aggressive attempts lower citing sharpy reversals in recent weeks in the back of trader minds. Triple daily lows at 93.20 and 91.60 are natural downside targets and supports. Q2 GDP disappointed slightly at 0.9% vs. 1.1% forecast. Overall the USDJPY traded with a low of 94.21 and a high of 94.89 before closing the day around 94.55 in the New York session.

The Sterling (GBP) started falling and made fresh month lows into Europe as support at 1.6400 gave way and the pair slipped to below 1.6300. Rightmove HPI -2.2% in August added to selling pressure. The Pound joined an Oil, EURO and Aussie bounce to finish well above 1.6300 going into a heavy data release Tuesday. Overall the GBP/USD traded with a low of 1.6276 and a high of 1.6483 before closing the day at 1.6350 in the New York session. July Core CPI forecast at -0.3% vs. 0.3% previously.

The Australian Dollar (AUD) led the way down in Asia slipping nearly 2% on the back of heavy China stock losses and a slide in risk appetite. Strong fundamentals of the Australian economy and hawkish rates outlook are colliding with the usual market correlation of sell the
AUD when stocks fall. Overall the AUD/USD traded with a low of 0.8156 and a high of 0.8326 before closing the US session at 0.8215. Looking ahead, RBA minutes from the August Meeting released.

Gold (XAU) fell heavily on USD strength to 930 supports. Overall trading with a low of USD$930 and high of USD$948 before ending the New York session at USD$934 an ounce.