Gold and 'Black Gold' helped to cool off the US Dollars recent win streak, as the EUR/USD peaked its upward climb just above 1.4800 at 1.4806 in early Asian trading. Although relatively better than expected ZEW data helped fuel the Euro as well, it seems that the strengthening in crude oil and gold was the prime catalyst in the EUR/USD move upward. However, as the Asia session wore on, the EUR/USD did fall from its highs to end the session just under 1.4770 as the short lived Euro rally seemed to fizzle a bit. EUR/JPY was choppy all session, stuck between 162.39 and 162.03 with no real direction.
AUD/USD benefited early from the rally in gold and oil, as it looked strong early taking off from its lows of 0.8704 to touch a .8742 high. The Aussie elation was short lived however, as the pair slid to fresh lows of 0.8697 mid-session. The Aussie Dollar was up from the lows by about 20 pips as of this writing. The NZD/USD followed the same path, and was ultimately higher by 25 pips from the 0.7125 open. AUD/NZD was on a downward road all session, starting near 1.2235 and dipping below 1.2200 as London watched the sun rise. It is hard to believe that this pair was above 1.2900 on the first of this month.
The vulnerable GBP/USD lost more ground, from 1.8675 to 1.8660 for the session ahead of the Bank of England's August minutes later at 8:30 GMT. Don't expect miracles here as UK politicians have been hapless in the wake of the Cable's collapse. Traders will seek an answer to when the BoE will lower interest rates as the minutes are read.
USD/JPY moved a bit higher in subdued trading, and the range was a slow and tight 30 pips, with it about 10 pips above the 109.70 open as of this report.
Be cognizant of the moves in oil and gold in the US, they have helped to guide this market…..
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