The USD continues to be smashed as Obama took the unprecedented step of addressing the nation about legislative negotiations outside of normal protocol where Presidential addresses to the nation are usually reserved for events such as national mourning. The speech only highlighted the wide divide between the President and the Republicans over the plan to raise the US debt ceiling and gave investors more reason to sell down the beleaguered USD. The USD fell heavily against all its 16 major trading peers and recorded an all- time low against the CHF trading below the crucial 0.8000 level. There was some speculation of BoJ intervention in the JPY but this now appears unlikely as USDJPY remains under pressure below 78.00. The Dollar index is at a 7 week low of 73.53.
In other news, billionaire George Soros, most famous for breaking the Bank of England, announced overnight that he will be ending his hedge fund manager career and handing back money to investors after returning an average of 20% per annum over the past 40 years. The Quantum Funds recent asset redistribution to 75% cash holdings was an early indication of this move and of Soros’ public comments that the financial markets had become increasingly difficult for him to evaluate. The AUD continues to defy expectations and rise towards its all- time highs above 1.1000. Trader’s will be keeping a very close eye on the Australian CPI data to be released today. A weak number will see a quick test of 1.0850 while a strong number will certainly see 1.1000 taken out. The NZD also performed well overnight hitting a 30 year high above 0.8740.
US equities were under pressure from the debacle in Congress and weaker than expected data that showed home prices fell the most in 18 months. The S&P 500 fell 0.4% to 1,332 as 3M announced results that were weaker than analyst forecasts and UPS signalled a slow third quarter. Earlier in Europe, both the DAX and FTSE finished flat at 7,349 and 5,930 respectively. US consumer confidence unexpectedly rose in July but it appears that all the good news is currently being ignored as all the focus is on the stalled US debt ceiling negotiations.
The plummeting USD saw commodity prices firm. Crude oil prices held steady above $99.00 after having traded momentarily above $100.00. Gold and Silver prices firmed with gold once again hovering around $1,620 and silver stronger to trade almost at $41.00. Soft commodities rose across the board with cotton the strongest performer while copper rose over 1.5%. The CRB index is higher by 2.86 points to 348.75.
