U.S. Dollar Trading (USD) company earnings from the US are becoming more importantwith most beating estimates overnight with the notable exception of Apple whichhas fallen 10% in after hours trade so far. Dow Jones still managed small gainshowever with the US house passing a vote to suspend the debt ceiling until May.Also the IMF downgraded its 2013 forecast for both global and developedcountries. Looking ahead, Weekly Jobless Claims are forecast at 359k vs. 335k previously.
The Euro (EUR) the EUR/USD failed to break free of the 1.3300 orbitand we fell from 1.3350 to 1.3270 in the US session before stabilizing andclosing at the familiar 1.3300 figure. EUR/CHF has been noted as a major sourceof the Euro selling which fell from 1.2400 to 1.2320. The outlook is mixed withthe recent rally struggling for fresh gain but not really much selling interesteither with risk appetite and stocks remaining near highs. The Sterling (GBP) is under pressure being sold on rallies and indanger of further losses on most of the GBP crosses with GBP/AUD at 1.5000overnight. Sentiment towards the Pound is souring because of the MPC signaledintent to expand their QE if the economy continues to stall. The MPC minutes overnight confirmed this with 1 member actually votingfor an expansion at January’s meeting. Governor King also commented on the relativestrength of the sterling. Looking ahead, January MPC minutes forecast at9-0 hold vote. Also November Unemployment Rate forecast at 7.8% unchanged fromthe previously month.
The Japanese Yen (JPY) USD/JPY and the Yen crosses all dipped overnight but foundsupport before bouncing back to opening levels in a good day for the Bullshoping that the correction was nearing completion. Caution is still neededhowever with comments from Global policymakers increasingly becoming more andmore protectionist. The 10% weakening in the Yen since the new measures announcedby the new PM may inspire other world leaders to announce similar measure intheir home countries. Australian Dollar (AUD) The Aussie kept to its recent range like clockworkbouncing off 1.0530 after CPI came out more cooler than forecast at 2.25% vs.2.4% y/y. The market has been unable to break out of the recent range for 3weeks now and it might take the RBA in February to finally give the market acatalyst that break through. Looking ahead, January HSBC Chinese manufacturing PMIpreviously at 51.5.
Oil & Gold (XAU) Gold pulled back after failing to break above $1700over the last week of trade. We may see more range trading but the risk isstill to the topside as central banks all intensify their extraordinary easingmeasures. Oil suffered from heavy profit taking flows to close near $95.50 still above thekey $95 level.
Pairs to watch
AUD/USD Chinese PMI tohelp AUD move?
USD/JPY Record Trade deficitto prompt more action? Yen Weakness?