Forex Market Summary

U.S. Dollar Trading (USD) continued its recent rallies on the back of other majors. The U.S. dollar was also aided by a technical rebound and a tumble in stick prices. In data news, the GDP for the second quarter was released at a better figure than expectations, with a reading of 3.4% (Forecast: 3.2%), the fastest rate since the first quarter of 2006. Core PCE suggested inflation was moderating, gaining at a surprisingly low 1.4 percent annual rate, within the presumed comfort range of monetary policymakers and the lowest since the second quarter of 2003. In U.S. share markets, further drop in stock prices ensured that the NASDAQ continued to fall, down by 37.10 points (-1.43%) whilst the Dow Jones also tumbled by -208.10 points (-1.54%). Crude Oil rose on Friday by US$2.07 a barrel to US$77.02 as investors remained concerned about recent U.S. economic growth and its effect on near term supplies.

The Euro (EUR) continued to ease on the back of the USD rally. Added to this was a sharp decline in the EURJPY cross with investors taking a risk aversion point of view. Overall the EURUSD traded with a low of 1.3630 and a high of 1.3753 before closing the day at 1.3641 in the New York session.

The Japanese Yen (JPY) continued to rally on unwinding of JPY crosses. Overall the USDJPY traded with a range of a low 118.02 and a high of 119.29 before closing the day at 118.81 in the New York session.

The Sterling (GBP) dropped sharply against the dollar simultaneously reaching a six week low versus the Japanese Yen as high yielder's were sold off across the board. Overall the GBPUSD traded with a range of a low 2.0251 and a high of 2.0493 before closing the day at 2.0259 in the New York session.

The Australian Dollar (AUD) was the biggest mover on Friday easing almost 200 points in the early part of the European Session. The Aussie Dollar moved on the back of the selling off of Japanese crosses which also eased substantially. Overall the AUDUSD traded with a range of a low 0.8520 and a high of 0.8768 before closing the day at 0.8535 in the New York session.

Gold (XAU) fell by US$2.70 an ounce to US$660.10
CURRENCY PAIR IN FOCUS

AUD/JPY The rise in risk aversion originally sent the low-yielding yen to a three-month high against the dollar and a six-week high versus the Euro. However, the Japanese currency's gains versus the dollar proved fleeting, with the greenback boosted by investors repatriating cash out of riskier investments. After an overnight sell-off in credit and stock markets investors continued to pare risky positions such as carry trades, in which they borrow in low yielding currencies to invest in higher-yielding assets. That punished carry-trade favorites such as the New Zealand and Australian dollars.