US Stimulus Package Sends Stocks Higher

Daily Forex Fundamentals | Written by Easy Forex | Oct 21 08 01:30 GMT |

U.S. Dollar Trading (USD) was able to make solid gains on the back of a positive reaction to news that the US was thinking of a second stimulus package in response to Bernanke's suggestion. Also helping sentiment was the better than expected at +0.3% in September vs. -0.9% previously. In the U.S. share markets, the NASDAQ was up 58.74 points (3.43%) and the Dow Jones was down 413 points (4.67%). Crude Oil closed up $2.40 ending the New York session at $74.25 per barrel. The Euro (EUR) gained during Asia testing the top of its recent range before pulling back and testing the downside. Support at 1.3380 gave way leading to the day lows as the market focused on the continued friction between European Banks and the German Government. Overall the EUR/USD traded with a low of 1.3290 and a high of 1.3530 before closing the day at 1.3350 in the New York session. The Japanese Yen (JPY) was sold for most of the day against the USD as equities recovered. The selling was tempered by mixed crosses with the EUR/JPY and GBP/JPY being dragged down by their respective majors although the AUD/JPY remained buoyant. Overall the USDJPY traded with a low of 101.37 and a high of 102.42 before closing the day around 102.10 in the New York session. The Sterling (GBP) the GBP rally seen during the Asian session was capped going into Europe by concerning Economic data. Public sector Borrowing blew out to 8.1B from 6.9B expected, the biggest 6 month budget deficit since WW2. Also released, Rightmove House prices showing the largest annual drop in House prices in 6 years. Overall the GDP/USD traded with a low of 1.7107 and a high of 1.7516 before closing the day at 1.7150 in the New York session. The Australian Dollar (AUD) continued to trade in a buoyant nature as it pushed the recovery envelope on high PPI data and soaring stocks. Q3 PPI gained 2% Q/Q vs. 1.0% expected. Large gains in Gold and Oil also helped to support. Overall the AUD/USD traded with a low of 0.6901 and a high of 0.7063 before closing the US session at 0.7030 looking ahead, RBA minutes from the October Meeting along with Governor Stevens Speaking. Gold (XAU) jumped higher on bargain hunting and real money investor demand. Overall trading with a low of USD$783.30 and high of USD$808.20 before ending the New York session at USD$797 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products