U.S. Dollar Trading (USD) strong US data helped reverse profit taking seen in the European session yesterday and stocks closed higher in the US and this positivity has continued into Asia trade so far Thursday. US Q2 Nonfarm Productivity at 1.6% vs. 1.4% and Q2 Labor Costs at 1.7% vs. 0.5% forecast. The USD is under pressure while sentiment remains ‘risk on’ and demand for the safe haven is low. Looking ahead, Weekly Jobless Claims forecast at 370k vs. 365k previously. Also ahead, International Trade Balance forecast at -47.5bn vs. -48.7bn.
The Euro (EUR) the EUR/USD is pushing back towards 1.2400 in gentle but bullish trade as hopes rise the ECB have the Euro crisis under control. News emerged overnight that the Troika inspectors will remain in Greece all of September and that the decision to give more aid will be made in October. Germany’s rating was confirmed at AAA by Fitch and helped to underpin the move higher. The Sterling (GBP) GBP/USD had a stellar day and was the strongest pair in the market after the BOE Governor King argued against cutting interest rates surprising the bears. Resistance was found just under 1.5700 and we are still under the level in Asia but well supported and looking to retest. Looking ahead, June Trade Balance forecast at -8.63bn vs. -8.36bn previously. Also ahead, ECB Monthly Bulletin.
The Japanese Yen (JPY) the USD/JPY is muddling around the Y78.50 level not moving much with pressure from USD selling and support from Yen Cross buying. GBP/JPY and AUD/JPY are both near recent highs and are threatening to break higher as risk appetite remains strong. Australian Dollar (AUD) the AUD/USD has broken 1.0600 in Asia Trade on Thursday after better than expected July Jobs data up +14k vs. 10k forecast and the Unemployment Rate remained at 5.2%. UPDATE BOJ Hold Interest Rates at 0.1%.
Oil & Gold (XAU) Gold is strong up near resistance at $1618 and threatening to break higher as the lows get higher. OIL/USD rallied again up to $94.50 before profit taking once again sent the energy back to opening levels near $93.50.
Pairs to watch
EUR/USD Rally to resume as stocks remain strong?
OIL/USD to break $95 as optimism dominates?