- Strong global manufacturing PMIs boost commodities, stocks, undermine dollar
- EU to approve Kraft deal for Cadbury if concluded
- ISM manufacturing index rises to 55.9 versus expectations of 54.5; 4-year high
- JP Morgan global manufacturing PMI rises to 55.0 in December, highest in nearly 4 years
- Fed’s Duke: Rates to stay unusually low for an extended period
- France’s Lagarde says GDP to rise 1% in 2010: Les Echoes
- S&P 500 rises 1.6$ to 1133, a 15-month high
- Oil up $2.19 to 81.55; Oil firm at $1120
EUR/USD rallied from early in the US session, breaking through resistance at 1.4420 and 1.4440, stalling just shy of last week’s 1.4458 high. The reflation trade was firing on all cylinders after the upbeat US ISM data showed a broad-based global manufacturing recovery. Commodities extended their rebounds and commodity currencies were heavy beneficiaries.
USD/JPY traded soft for much of the US morning despite buying of AUD/JPY. USD/JPY eased to 92.18 before clawing back lost ground in the afternoon. It ends at 92.58, supported by AUD/JPY which closed near session highs of 84.56, at 86.50.
GBP/USD and EUR/GBP were very volatile today. GBP was in demand this morning for reported dividends from a UK clearing bank, repatriating earnings from abroad. Later in the session, German demand for EUR/GBP overwhelmed any cable flows. As EUR/GBP rose late in the London session cable fell to 1.6085 and we end near those lows. EUR/GBP reached 0.8966 at the fixing and ends at 0.8955.
AUD was the sessions bets performer, as one would expect given the Asian-led manufacturing rebound. The US data was just icing on the cake. CAD strengthened as well but dipped on profit-taking in the afternoon.