Currency Trading Summary

U.S. Dollar Trading (USD) was relatively unchanged against most pairs as the large moves seen on Wednesday night were consolidated. The major move seen in the market was the GBP/USD which fell aggressively after rumors spread through the market of PM Brown possibly resigning. Weekly Jobless Claims improved to 621K vs. 625K.  Crude Oil finished down $2.69 to finish the day at $68.81 a barrel. In US share markets, the Nasdaq was up 24 points or 1.32% and the Dow Jones was up 74 points or 0.86%. Looking ahead, May Non Farm Payrolls are forecast at -520K vs. -539K. The May Unemployment rate is forecast at 9.2% vs. 8.9%.

The Euro (EUR) kept to a relatively tight range with weakness before the ECB press conference being short-lived. When Trichet said nothing to spook the market and the ECB held at 1.00% with no expansion of the quantitative easing the market tested 1.4200 but couldn’t close above. Overall the EUR/USD traded with a low of 1.4069 and a high of 1.4243 before closing at 1.4175. Looking ahead, Trichet Speaks.

The Japanese Yen (JPY) with the USD/JPY starting to edge higher the market is on edge that the Yen may be close to new bouts of selling with crosses sitting just under new head highs. EUR/JPY remained buoyant although year highs at 138 are proving difficult to test.  Overall the USDJPY traded with a low of 95.95 and a high of 97.00 before closing the day around 96.80 in the New York session.

The Sterling (GBP) surged on news housing prices jumped 2.6% in May from a Halifax report. The BoE held at 0.5% and did not expand QE program. Rumors of PM Brown resignation sent the pair crashing towards 1.61. Also weighing on the Pound was end of the  $15B chinalco-Riotinto deal. Overall the GBP/USD traded with a low of 1.6084 and a high of 1.6437 before closing the day at 1.6130 in the New York session. Looking ahead, PPI is forecast at 0.8% in May.

The Australian Dollar (AUD) traded around the 0.8000 level before dropping to 0.7900 on the Chinalco news before recovering on a strong rally in Commodities and buoyant stock market. Weighing was Aprils Trade Balance which showed a surprise -91K vs. 1400M previously. Overall the AUD/USD traded with a low of 0.7886 and a high of 0.8093 before closing the US session at 0.8010. UPDATE APRIL Trade Balance -91M vs. 1400M previously.

Gold (XAU) gained bouncing off the $960 level to finish on a bullish footing near $980 an ounce. Overall trading with a low of USD$960 and high of USD$983 before ending the New York session at USD$978 an ounce.