US Auto Bailout Helps Global Market Sentiment

Daily Forex Fundamentals | Written by Easy Forex | Dec 09 08 02:07 GMT |

U.S. Dollar Trading (USD) Global equities rallied yesterday as the market absorbed President elect Obama's new multi billion dollar infrastructure plan. Also of note was the moving ahead of the US automakers Bailout bridge loans. The USD was weaker as commodities surged on perceived demand for these projects and safe haven flows decreased. In U.S. share markets, the NASDAQ was up 62.43 points (4.14%) and the Dow Jones was up 298 points (3.46%). Crude Oil closed up $2.90 ending the New York session at $43.70 per barrel. Looking ahead, October Pending Home sales are expected to fall -3.2% vs. -4.6% previously. The Euro (EUR) staged a major rally as risk taking increased and USD weakened. Large EUR/JPY buying buoyed the major past resistance at 1.2900. Most European bourses gained over 5% and the market mood was extremely optimistic. Eurozone data was weak though with German October Industrial Production seen -2.1% after falling -3.6% previously. Overall the EUR/USD traded with a low of 1.2730 and a high of 1.2967 before closing the day at 1.2920. Looking ahead, German Zew survey is forecast at -55 vs. -53.5 previously. The Japanese Yen (JPY) lost ground against all pairs as the safe haven currency was sold on renewed risk appetite in the market. USD weakness kept USD/JPY gains to a minimum but carry trades led by AUD/JPY and NZD/JPY enjoyed sizable gains. Overall the USDJPY traded with a low of 92.58 and a high of 93.91 before closing the day around 93.20 in the New York session. UPDATE Q3 GDP revised lower to -0.5% vs. -0.1% initial. The Sterling (GBP) was another major benefactor of improved market sentiment, surging higher and testing 1.5000 as Oil rallied and global stocks made. UK PPI dropped -0.7% m/m vs. -0.4% expected as demand slumped. Overall the GDP/USD traded with a low of 1.4700 and a high of 1.5047 before closing the day at 1.4900 in the New York session. Looking ahead, October Industrial Output is seen -0.5% vs. -0.2%. Also released Manufacturing Production seen at -0.6% vs. -0.8% previously. Finally the UK trade balance is seen unchanged in October at -7.5% vs. -7.48%. The Australian Dollar (AUD) like other higher yielding currencies got a major boost from the improved market sentiment and gains in the commodity index. The Australian Economy while slowing is still not in recession and this is helping to support the AUD relative to other currencies. Overall the AUD/USD traded with a low of 0.6471 and a high of 0.6690 before closing the US session at 0.6625. UPDATE Australian November Business Confidence fall to -30 vs. -29 previously. Record low. Gold (XAU) gained as Oil rallied over 5% on the day and the USD weakened. Overall trading with a low of USD$759 and high of USD$782.5 before ending the New York session at USD$772 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