- USD: Higher, Fitch rating warnings boosts safe haven flows
- JPY: Higher, machinery orders rise, Fitch warns on Japans debt rating
- EUR: Lower, German Zew business sentiment posts an unexpected decline, CPI decline
- GBP: Mixed, Fitch warns UK most at risk to debt downgrade, retail sales and house prices rise
- CAD and AUD: AUD lower, CAD higher, tracking stocks and crude oil, Australia’s business confidence rise
Overview
USD edged higher Tuesday rebounding from a 15 month low with GBP and JPY pressured by a warning from Fitch that UK and Japanese debt rating is at risk of a downgrade because of rising government spending. GBP downside was limited by report of rising UK house prices and a report that UK retail sales post the strongest monthly growth in seven years. Commodity currencies drifted lower as the stock rally slows. The EUR was pressured by report weaker than expected Germans Zew business confidence. AUD traded lower despite report of strong Australian business confidence data. The commodity currencies turned higher midsession as crude and gold prices trade higher. USD rebound was limited by optimism about the global recovery as the Baltic Freight Index rose to a three month high, the Blue Chip Index for November shows that forecasters have raised their US 2010 GDP projection to 3% and Moody’s upgraded China’s credit rating. A Bloomberg survey of 64 economists finds that they expect the US economy will expand by 3% into year-end and that growth will be driven by
manufacturing and business spending as exports rise and consumer spending slows. Risk sentiment and the direction of equity markets remain the main market drivers for the Forex trade.
