Day Wrap-Up: Buyers go for the Euro; Portuguese auction a success (Barcelona) – The European shared currency was the star of the day, catapulted north in quite an aggresive fashion. EUR/USD broke through a key level at 1.3000, spiking higher to 1.3140, EUR/JPY took off to the upside too, landing at 109.00 by NY close, EUR/AUD extended its correction to 1.3190, while EUR/GBP had marginal gains at 0.8330.
The revival of the Euro, which resulted on a bulls stampede, lies on varies elements; firstly, there was talks that the European stability mechanism could take additional contributions from financial institutions, easing market concerns, however, what made the Euro look an appealing currency again was the success on the Portuguese bond auction.
The outstanding result in the Portugal debt allocation narrowed dramatically the spreads in all European periphery yields vis-a-vis the German bund, showing signs of improving market confidence. ECB, Japan and China are thought to have been active buyers on today’s bond selling process.
Another currency imposing a strong bullish tone across the board was the Cable, which finally managed to pierce its broad range 1.5350-1.5650 against the USD to hit a fresh 1-month high past 1.5750. The Aussie roared ahead too, buoyed by reports showing that flooding in Brisbane may not have as negative impact for the economy as previously feared. AUD/USD recovered to levels near parity.
On the flip side, taking a back seat, were the US Dollar and the Japanese Yen, both hit by the powerful resumption of risky trades. Commodities continued its sharp rallies, gold steady at $1,386.00 while oil ended near $92.00. The S&P 500 rose to its highest levels since the slump of 2008, up 0.9% to 1286.00. US yields rose 0.3% to 3.37%


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The Art&Science of Trading Gold
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