The resurgence of the risk trade as the NY session wore on saw the USD come under pressure once again. Equities closed the day about 0.5% higher after an ugly open well in negative terrain. Not only were corporate earnings better but economic data out of the US continued to look positive for risky assets. Consumer prices printed a faster than expected 1.5% on the year-on-year core rate while initial jobless claims printed a better than anticipated 514K †the lowest read since the first week of January. Meanwhile, the details of the NY Empire and Philly Fed manufacturing reports were upbeat with new orders extending higher in both.

The commodity space was mixed with oil jumping more than 3% on the back of a significant draw in weekly gasoline inventories. Year-to-date, stockpiles remain well above seasonal trends and thus the euphoria seems unjustified here. Gold was under pressure all session and had dropped about -$12 to $1050 as we write. We have been extremely vocal about the one-sided nature of the gold trade †with net long contracts hitting a new record high just last week. The potential for a nasty correction lower still looms, in our view.

EUR/USD recovered after an early session low just above the 1.4840 mark. The pair found more momentum buying through 1.4900 and eventually climbed towards the 1.4940/50 zone ahead of the close. The path of least resistance still looks to be the 1.50 mark. USD/JPY jumped from a 90.15 open towards the 90.60 area as yen strength started to come off the boil across the board. Japanese economic fundamentals, especially on the trade front, do not augur for a very strong yen indeed. The pair looks to be closing above the 90.27 Kijun line and this suggests more upside near-term.