U.S. Dollar Trading (USD) continued to be well supported even as US data showed a major slowing in demand. December Retail Sales dropped -2.7% vs. -1.2% forecast as Christmas sales didn't live up to hopes. The Beige Book showed widespread economic weakness and was expected to continue. In U.S. share markets, the NASDAQ was down 56 points (-3.67%) and the Dow Jones was down 248 points (-2.94%). Crude Oil closed down $0.50 ending the New York session at $37.78 per barrel. Looking ahead, Weekly Jobless Claims are expected at 500K vs. 467K previously. Also released, December PPI is forecast at 0.1% m/m.
The Euro (EUR) was able to rally in Asia before finding levels above 1.33 hard to sustain in Europe. Weak US data failed to inspire Euro buying as heavy EUR/JPY selling capped and speculation of deeper rate cuts from today's meeting weighed. German GDP was released at 1.3% vs. 2.5% y/y. Overall the EUR/USD traded with a low of 1.3094 and a high of 1.3338 before closing the day at 1.3210. Looking ahead, Eurozone ECB Announcement expected to cut 0.5%. Also released December Eurozone Inflation forecast down -0.1% vs. -0.5% previously.
The Japanese Yen (JPY) was sold during Asia as stocks there rallied before dismal US Retail Sales sent equities tumbling. The Yen strengthened considerably to end broadly were it began the day. Overall the USDJPY traded with a low of 88.62 and a high of 89.95 before closing the day around 89.10 in the New York session. UPDATE November Machine Orders fell 16.2% vs. -8.1% forecast.
The Sterling (GBP) rallied hard in Asia before giving up some gains as fear reentered the market during the US session. EUR/GBP selling supported. Overall the GDP/USD traded with a low of 1.4493 and a high of 1.4706 before closing the day at 1.4600 in the New York session.
The Australian Dollar (AUD) Reversed Asian gains to plummet back to support at 0.6600 vs. 0.6800 highs in early Europe. Hurting sentiment was the large falls in Commodities and Equities. Overall the AUD/USD traded with a low of 0.6578 and a high of 0.6791 before closing the US session at 0.6620. UPDATE DECEMBER UNEMPLOYMENT falls -1.2K vs. -20K forecast. Unemployment Rate steps up to 4.5% from 4.4% previously.
Gold (XAU) dropped as commodities were broadly weaker. $800 is the next key level on the downside. Overall trading with a low of USD$807 and high of USD$829 before ending the New York session at USD$810 an ounce