Oil Rebounds As Bernanke And Paulson's Gloomy Talk Hurts The Dollar

Daily Forex Fundamentals | Written by Easy Forex | Jul 11 08 04:09 GMT |

U.S. Dollar Trading (USD) took hits from multiple US officials speaking. Former Fed member Poole stated that the government backed Fannie Mae and Freddie Mac were technically 'insolvent' and would need to be bailed out. Fed chief Bernanke requested legislation for stronger supervision of investment banks and large dealers while Treasury Secretary Paulson noted that financial firms must be allowed to fail with taxpayer backstops reserved only for extraordinary events. Weekly Jobless claims did provide some upside though coming in at 346K vs. expectations of 395K. In the U.S. share markets, the NASDAQ was up 22 points (1.03%) and the Dow Jones was up 81 points (0.73%). Crude Oil closed up $5.25 ending the New York session at $141.30 per barrel. Looking ahead, July Trade Balance is expected at -62.5 Billion after June came in at -60.9 Billion. Also scheduled for release the July Consumer Sentiment expected 55.5 slightly weaker then 56.4 in June.

The Euro (EUR) gained against the USD as surging oil and comments from US officials supported. Economic data out of the Euro zone continued to weaken with the May French Industrial production coming at -2.6%. Overall the EUR/USD traded with a low of 1.5691 and a high of 1.5803 before closing the day at 1.5780 in the New York session.

The Japanese Yen (JPY) again tracked the stocks very closes in a tight range around the 107 level in the USD/JPY. Gain in the EUR/JPY and AUD/JPY supported. Overall the USDJPY traded with a low of 106.70 and a high of 107.40 before closing the day around 107.20 in the New York session.

The Sterling (GBP) came under selling pressure as the Halifax House price index disappointed to the downside coming in at -2.0% in May after falling 2.5% in April. The Bank of England held rates 5.00% as widely expected and along with the weakening USD allowed the Cable to pare losses. Overall the GBP/USD traded with a low of 1.9712 and a high of 1.9839 before closing the day at 1.9780 in the New York session.

The Australian Dollar (AUD) received a major boost from the strong Employment change figures for May coming in at +29.8K beating expectation of +10K and negating the -25K in April. The Unemployment Rate also decreased from 4.3% to 4.2% which along with soaring commodities allowed the Aussie to regain the 0.9600 level. Overall the AUD/USD traded with a low of 0.9545 and a high of 0.9640 before closing the day at 0.9620.

Gold (XAU) gained as USD weakness, banking concerns and soaring Oil all benefited the precious metal. Overall trading with a low of USD$926 and high of USD$948 ending the New York session at USD$945 an ounce.

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