U.S. Dollar Trading (USD) the USD was supported by the lack of enthusiasm in the June FOMC minutes for further monetary stimulus only a few members looking to expand the QE. The market is expecting the FED to do more to help the US economy in the medium term but it may be through new tools that are less controversial than the previous bond buying program. Looking ahead, Weekly Jobless Claims forecast at 372k vs. 374k previously.
The Euro (EUR) the EUR/USD hit fresh lows once again overnight with bounces proving very short-lived and the pair hit new 1.2210 lows. The downtrend is firmly in place but the market is heavily short and it would not take much to spark a short covering rally. The lack of QE3 in the FOMC minutes is not helping the USD side of the EUR/USD equation however.
The Japanese Yen (JPY) the BOJ has held rates at 0.1% today but they did offer the market some fine tuning of their monetary policy by increasing short term asset buying at the expense of the longer term operations. The USD/JPY shot immediately toward Y80 but sellers were aggressive at the level and we went back to the new lows under Y79.50.
The Sterling (GBP) the GBP/USD reversed a rally from 1.5570 to 1.5500 after the FOMC minutes threw cold water on QE3 hopes. The lack of EUR/USD support is weighing on the GBP which had been developing some bullish feel in the previous few weeks. A break of 1.5450 would put 1.5000 back into the radar and encourage further attempts lower. Looking ahead, May Industrial Production forecast at 0.0% vs. -0.8% previously. Also ECB President Draghi speaks today.
Australian Dollar (AUD) The AUD/USD was another currency in play during the Asian session as June Employment dropped -27k unexpectedly vs. 0k forecast. The Unemployment rate also increased to 5.2% and the AUD/USD was crushed lower under 1.0200 to 1.0180 after opening at 1.0260. Looking ahead, Friday the big risk event of the weak is the Chinese GDP which is expected to show a significant slowdown and is concerning Asian investors.
Oil & Gold (XAU) consolidated the big fall from $1600 able to rally briefly bounce above $1580 but is looking heavy and sentiment is turning against the precious metal. OIL/USD was stronger bucking the trend of other assets with the recent sell off overdone and buyers emerging under $85.