US Home Sales Rebound, Australia Cuts Rates

Daily Forex Fundamentals | Written by Easy Forex | Feb 04 09 01:34 GMT |

U.S. Dollar Trading (USD) weakened sharply in the US after a volatile day of trading. December US Pending Home sales gained 6.3% vs. -3.7% previously helping stocks to rally. The US FED also extended swap lines with foreign banks and emergency lending programs which had the effect of weakening demand for the USD. Crude Oil closed up $0.70 ending the New York session at $40.78 per barrel. In US share markets, the Dow Jones gained 141 points or 1.78% and the NASDAQ gained 21 points or 1.46%. Looking ahead, ADP Private Employment Report forecast down -530K vs. -693K. Also released, ISM non-manufacturing forecast to drop -39 vs. 40.1. The Euro (EUR) surged higher as a wave of optimism overcame the market with European shares rallying 2% and risk appetite improving. EUR/JPY gained 3% and the Euro reclaimed the 1.3000 level. December PPI dropped 1.3% vs. -1.1% forecast. German Retail Sales dropped -0.2% in December. Overall the EUR/USD traded with a low of 1.2803 and a high of 1.3056 before closing the day at 1.3040. Looking ahead, December Eurozone Retail Sales forecast to drop -0.3% vs. 0.6% forecast. The Japanese Yen (JPY) was a major mover, weakening considerable on the back of the BOJ’s plan to buy 1T Yen of the countries bank shares to help sure up the sector. Also helping crosses to rally was the large rally in European and US stocks. A sustained rally will require the USD/JPY to reclaim the 90 level. Overall the USDJPY traded with a low of 88.61 and a high of 89.97 before closing the day around 89.45 in the New York session. The Sterling (GBP) fell in Asia but the market was buoyant and cable rallied of the 1.42 level at the New York open. Helping sentiment was a rebound in the Construction PMI off record lows to 34.5 vs. 28.8. GBP/JPY was especially strong. Overall the GDP/USD traded with a low of 1.4156 and a high of 1.4484 before closing the day at 1.4420 in the New York session. The Australian Dollar (AUD) rallied over 3% in the back of short covering after the RBA cut rates by 1.0% and the government announced a second stimulus plan to the effect of $42AUD Billion. Overall the AUD/USD traded with a low of 0.6304 and a high of 0.6545 before closing the US session at 0.6530. Looking ahead, December Retail Sales are forecast to rise 1.4% vs. 0.4%. Also released, December Building Permits forecast at 2.5% vs. -12.8%. Gold (XAU) the $900 proved a critical level again with the market gravitating around the level during the trading day. Reduction in risk was offset by the weakening USD. Overall trading with a low of USD$889 and high of USD$912 before ending the New York session at USD$900 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