*U.S. Dollar* Trading (USD) the dollar was able to fund support
overnight after S&P downgraded Japan and stock markets stalled. Weekly
Jobless Claims were weak jumping to 454k vs. 405k forecast and Durable
Goods also fell -2.5% in December. In US stocks, DJIA +4 points
closing at 11989, S&P +3 points closing at 1299 and NASDAQ +15 points
closing at 2755. Looking ahead, Q4 GDP forecast at 3.5% vs. 2.6%
previously Q/Q.
The *Euro* (EUR) pushed higher into the 1.3700 region as sentiment
towards the single currency continues to improve with traders noticing
CEB's Bini-Smaghi comments that the recent rise in inflation is hard
to ignore. EUR/USD traded with a low of 1.3635 and a high of 1.3760
before closing at 1.3730. Looking ahead, December M3 Money Growth
forecast at 2% vs. 1.9% previously.
The *Japanese Yen* (JPY) was a big mover yesterday as S&P downgraded
Japan to AA- on the back of a 'lack of a coherent strategy' to deal
with their debt situation. USD/JPY moved from Y82 to Y83 very quickly
before consolidating the move for the rest of the session. Overall the
USDJPY traded with a low of 82.00 and a high of 83.23 before closing
the day around 82.75 in the New York session.
The *Sterling* (GBP) pushed towards 1.6000 before reversing into the
close on USD strength and market wide profit taking. GBP/JPY was
boosted by the Japanese downgrade and is well positioned for further
upside. Overall the GBP/USD traded with a low of 1.5878 and a high of
1.5994 before closing the day at 1.5930 in the New York session.
The *Australian Dollar* (AUD) was hurt by the Japanese Downgrade and
pullback in Gold overnight falling below 0.9900 after testing parity
in Asia. Also weighing on the Aussie was the proposed flood levy
announced yesterday but the Federal government. Overall the AUD/USD
traded with a low of 0.9873 and a high of 1.0003 before closing the US
session at 0.9915.
*Oil & Gold* (XAU) continued to find heavy selling pressure in the US
session on further liquidation from investors. Overall trading with a
low of USD$1310 and high of USD $1348 before ending the New York
session at USD$1315 an ounce. Oil's volatility continued down towards
the key $85 level. WTI Oil Closed -$1.69 at $85.60 a barrel
Source: ActionForex.Com
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