The US Dollar began the week in Asian on the defensive as traders pushed riskier currencies higher right out of the gate. News articles off the presses quieted any rumors of China allowing the Yuan to appreciate against the Greenback. The big blow to that talk came from Chinese Vice Commerce Minister Jian, when asked about talk from the Peoples Bank of China that spoke of a gradual appreciation of the Yuan last seen in July 2008, stated, ''I don't think the central bank meant to say that...''
And so US President Obama's first trip to China was heralded by a further selling of the dollar as traders bought into Euros, Pounds, Aussie and Gold. EUR/USD opened the day near 1.4915 and meandered its way to highs just over 1.4970. GBP/USD opened about 20 pips higher at 1.6700 levels and pushed over 1.6730 for session highs as the pair was well bid by rumored sovereign funds. The AUD/USD moved higher in tandem with the Euro today, but was also boosted by the strong demand for commodities, most notably gold. Although the range was timid, the pair topped 0.9350 after closing last week near 0.9325 levels. Australian monetary policy meeting minutes are due out early tomorrow.
USD/JPY drifted slightly lower, shedding 25 pips from the open to 89.40, but the currency moves did not reflect the positive GDP data released earlier. Japanese Q3 GDP came in at a surprising 1.2% versus the expected 0.7% and prior 0.7%, posting the best results since Q1 of 2007. With the economy growing for the second consecutive quarter, demand for risk sent the yen crosses higher for the better part of the day.
Spot gold had an impressive run today, as it continued to push through new record highs over the course of the trade day, topping out at just near $1130.50. The gold strength seemed to pause heading into London trading, but the price action has been one way only for the start of the week.
Tomorrow in the US brings vital data in the guise of Retail Sales at 13:30 GMT and a speech on the economic outlook by FOMC chairman Bernanke at 17:50GMT.
