Skip to content

Dollar selling gets to panic levels

Data released didn't help with Jobless claims jumping to 573K from the previous 509K and the October Trade Balance also weakened to -57.2K from -53.5K.  Other factors preventing the USD going forward are the Huge Trade deficits, the 1% interest rate and significant gains in commodities.

OPEC members talked about cutting supply creating a surge in Oil which closed up $4.46 closing the New York session at $47.98.  In the markets, NASDAQ was down 3.68% and Dow Jones was also down 2.24%.  Figures released today are the US retail sales for November, forecast at -1.9% compared to the previous -2.8%, also released is November PPI which is seen at -2% compared to -2.8% previously.

Euro's key technical levels were erased last night at 1.3080 and 1.3290 leaving the market long and bullish.  The Euro received a substantial boost from the 10% gain in Oil and helping to maintain these gains was the warning from ECB member Weber that the cutting cycle may be nearing its end.  EUR outperformed the pound and tested resistance at the 0.89 level.  EUR/USD closed at 1.3340 after a low of 1.3007 and a high of 1.3405.  Looking ahead is the release of October Industrial Production expected to fall to -1.6%.

Sterling was left behind by most of the majors but did gain as the USD lost value.  Heavy EUR/GBP buying continues and the large stock falls in the US weighed heavily on GBP/JPY.  Although still at low levels, the December CBI orders came in better than expected at -35 compared to the -44 forecast.  GBP/USD closed the day at 1.5010 after highs of 1.5078 and a low of 1.4796.

AUD had good support as it tracked the EURO and commodities higher.  The pair rallied to the 0.6800 barrier as resistance was broken at 0.6680.  The AUD traded against the USD with a high of 0.6680 and a low of 0.6550 before closing at 0.6720.

With USD being sold steadily along with the increase in Oil, Gold surged.  After trading at a low of $802 Gold broke through tough resistance trading at a high of $834 before weakening of to close at $821.

Related