The USD and EUR provided some fireworks on Thursday taking into context that the two found themselves well within range at the end of the day. The EUR initially began to trade weaker against the USD after a downgrade of Spanish Sovereign Debt. However, as the day continued the EUR did find footing and begins today’s session within known values. The day proved one of caution among many of the currencies, but the key component were the declines among most of the international bourses – including Wall Street. Today’s trading in equities should prove more than interesting after the rather lackluster results this week. The question is whether equities are under pressure because of profit taking after a rather strong showing the past few months, or if what is taking place is a sign that investors are worried about long term economic prospects due to the high price of Crude Oil.
Today the U.S. will release Retail Sales data and will see a Preliminary Consumer Sentiment reading from the University of Michigan. Some inflation data will come from Germany and the U.K. today and this will prove interesting taking into account the Bank of England signaled no changes to their monetary policy yesterday, and the ECB has made suggestions about a possible interest rate hike. As critical as economic data always is, the day’s focus in many respects will be geo-political. There are plans for demonstrations in Saudi Arabia today and internationally investors will watch developing news from the Middle East with intent.
Economic data from the U.S. has faltered recently, yesterday’s weekly Unemployment Claims missed their estimate and came in with a result of 397k instead of the expected 375k outcome. Today’s Retail Sales are expected to show a slight improvement, but Consumer Sentiment is forecasted to dip because of the rise in energy prices that have swept the States. The U.K. produced slightly better Manufacturing Production results on Thursday with an outcome of 1.0%, bettering the anticipated mark of 0.8%, however the number will not be enough to convince investors that strong growth is around the corner.
Gold traded lower yesterday, breaking its consolidation and is around 1413.00 USD as of this writing. Gold must be monitored closely today due to geo-politics and its ability to become a safe haven channel. Crude Oil prices traded slightly lower Thursday, but the commodity remains above 100.00 a barrel and will continue to get plenty of attention. Needless to say if tension rises in the Middle East and North Africa the price of Crude Oil will become swift.
The JPY and AUD traded in relatively tight ranges yesterday mirroring their performance from the day before. Asian traders have shown that they are cautious and this was reflected with a rather weak showing across many of the bourses. Japan continues to turn in rather ugly economic data and has not shown any ability to prove that it is about to climb out of a rather stagnate malaise. The AUD should be watched and taken into consideration if volatility strikes Gold. The precious metal set record recently but has fallen off from its highs, going into the last day of trading this week Gold will have many investors attention.
Written by bforex.com
