U.S. Dollar Trading (USD) the dollar had a mixed day on Friday with stocks finishing flat we looked to other stories to move the FX markets. US Q3 GDP was slightly stronger than forecast at 2.0% vs. 1.9% previously. The large drop in USD/JPY was on the back of profit taking slipping to Y79.50 vs. Y80 previously. Looking ahead, September Personal Income forecast at 0.4% vs. 0.1% m/m previously. Also September Consumption forecast at 0.6% vs. 0.5% m/m previously.
The Euro (EUR) focus on Greece once again with a leaked troika report suggesting other EU nations would have to take a haircut on their current loans and allow up to 2 more years for Greece to implement the Austerity/labor reforms. Adding to the uncertainty was talk in the markets that Greece’s opposition would block the new proposed labor laws. The Sterling (GBP) had a very quiet end to the week falling back to 1.6100 after finding resistance at 1.6140 twice. The flat US stocks hurt sentiment and prompted a small pullback but EUR/GBP selling supported again with the pair remaining just above the 0.8000. Looking ahead, German CPI forecast at 0.0% m/m.
The Japanese Yen (JPY) USD/JPY was the most active pair in the market with a sharp reversal from Y80 after the US GDP data failed to inspire fresh gains. Profit taking ahead of the BOJ meeting dominated the price action Friday. The BOJ is expected to be aggressive when it concludes its meeting tomorrow with an increase to its own Asset Purchase Program and potentially sets its inflation target higher. Australian Dollar (AUD) failed to break 1.0300 during the European session Friday and enjoyed a short squeeze back to 1.0380 as US stocks pared back losses. AUD/JPY capped with the USD/JPY selling pushing the cross back to Y82.50. Looking ahead, no economic data from Asia today.
Oil & Gold (XAU) found support just above $1700 and bulls caught the market short quickly popping back to $1718. OIL/USD fell even with the large storms in the Atlantic finding support at $85.
Pairs to watch
EUR/USD 1.2900 to hold?
OIL/USD Storm to provide support?