U.S. Dollar Trading (USD) broke some usual correlations with strong stocks resulting in USD strength on the back of US Unemployment Data. July Unemployment rate at 9.4% vs. 9.6% expected and Non Farm Payrolls at -247k vs. -320k forecast. The Price action suggests that some investors are looking to the US to be the first out of the recession given they were the first in. Crude Oil Closed down $1.01 at $70.93. In US share markets, S&P ended +13.4 points (1.3%) at 997, NASDAQ ended +27 points (+1.3%) at 2000 and DOW JONES ended +113 points (+1.2%) at 9370.
The Euro (EUR) suffered as the USD showed a massive reversely of fortune and longs were aggressively liquidated. Stops at 1.4300 and 1.4200 added to the selling pressure with some analysts calling for retest of the 1.4080 supports. June German Industrial Production at -0.1% vs. 0.6% forecast. Overall the EUR/USD traded with a low of 1.4154 and a high of 1.4413 before closing at 1.4169. Looking ahead, Eurozone Sentix Index forecast at -26.2 in August vs. -31.3 previously.
The Japanese Yen (JPY) was the biggest loser on the night after USD/JPY broke above 96 Yen and risk appetite and USD strength combined for a major breakout. Stops at 96.50 and 97 fueled the accent to above 97.50. Yen losses outweighed any losses on the majors and EUR/JPY and GBP/JPY finished at year highs. Overall the USDJPY traded with a low of 95.05 and a high of 97.78 before closing the day around 97.60 in the New York session. UPDATE June Current Account +144% and June Machine Orders +9.7% vs. +2.9% both very strong.
The Sterling (GBP) fell against the USD but held up well in a 'risk on' environment with GBP/JPY and EUR/GBP helping cable to not fall heavily. Some residual selling from the BOE's QE expansion announcement on Thursday continued to weigh as did July PPI input at -1.4% vs. -0.8% forecast. Overall the GBP/USD traded with a low of 1.6652 and a high of 1.6832 before closing the day at 1.6668 in the New York session.
The Australian Dollar (AUD) price action was similar to the GBP with USD strength stopping AUD/USD climbing above 0.8400 but heavy AUD/JPY buying on clean break into 81 Yen helped to support on dips and helped to limit AUD/USD losses. EUR/AUD slumped as the single currency suffered the brunt of the USD strength. Overall the AUD/USD traded with a low of 0.8344 and a high of 0.8452 before closing the US session at 0.8367.
Gold (XAU) was whippy as the USD strength countered any attempts to rally, finishing lower on the day but above $950 supports. Overall trading with a low of USD$966 and high of USD$953 before ending the New York session at USD$955 an ounce.
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