U.S. Dollar Trading (USD) enjoyed gains all day as the Euro led the majors lower. Oil came off 2% along with Gold and Copper. Stocks were also hit hard by profit taking and helped stoke safe haven buying. TIC long term purchases fell to $11Bn in April. Crude Oil closed down $1.43 to finish the day at $70.61. In US share markets, the Nasdaq was down 42 points or -2.28% and the Dow Jones was down 187 points or -2.13%. Looking ahead, May Housing Starts are forecast at 0.49M vs. 0.45M previously.
The Euro (EUR) continued with Friday’s theme of a slow trend lower. The Pair fell from 1.4000 to test support at 1.3790 before bouncing off 1.3750. Numerous negative Euro stories flooded the market yesterday which combined with stock weakness for a substantial move. Overall the EUR/USD traded with a low of 1.3936 and a high of 1.4128 before closing at 1.4010. Looking ahead, German Zew Survey(Economic Sentiment) for June forecast to rise to 35 from 31 previously.
The Japanese Yen (JPY) USD/JPY initially found support from USD strength until mounting stock market losses forced the pair back below 98 Yen. Crosses were under severe pressure with AUD/JPY falling from 80 to 77.5 Yen. Overall the USDJPY traded with a low of 97.57 and a high of 98.60 before closing the day around 98.85 in the New York session. Looking ahead, BOJ minutes released Tuesday.
The Sterling (GBP) held up better than most but succumbed to USD strength. EUR/GBP broke through 0.8500 and supported during the day. A CBI report expects the UK economy to not rebound until 2010 and that expansion of the Quantitative easing program will be required. Overall the GBP/USD traded with a low of 1.6240 and a high of 1.6436 before closing the day at 1.6310 in the New York session. Looking ahead, May CPI is forecast at 0.3% vs. 0.2% previously.
The Australian Dollar (AUD) was hit the hardest overnight as the toxic mix of risk aversion and weak commodities forced the Aussie below 0.8000. AUD/JPY in Asia started the move lower with the pair not finding support until 0.7900. Overall the AUD/USD traded with a low of 0.7903 and a high of 0.8095 before closing the US session at 0.7950. Looking ahead, RBA minutes from the June meeting released.
Gold (XAU) slumped as USD strength hurt gold’s hedging appeal. Overall trading with a low of USD$925 and high of USD$939 before ending the New York session at USD$928 an ounce.