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Forex today: commodities stole the show, Gold takes a big hit

The greenback was higher again on Thursday before the showdown that is tomottows Nonfarm payrolls. However, the real driver in the greenback's upside was a fallout in higher-beta markets, so we start with the commodities first today.  

The index that measures the overall direction of commodity sectors known as the CRB index,  revealing the directional movement of prices in overall commodity trades, was in freefall for yet another consecutive day. Gold dropped heavily to the year-long trend supporting area with a move extended when the DXY popped on Washington kicking the can down the street again with respect to legislation to extend the funding for the U.S. government through to Dec. 22 and avoiding another government shutdown. Oil was up on the Nigeria strike threat while copper was a fade. 

AUD/USD was making fresh lows at the end of the NY session, down to 0.7505 from a high of 0.7569, extending losses from 0.8125 with eyes on the 0.7480 target. The Kiwi was pushing for 29th Nov lows at 0.6816 but got held up at 0.6825. The Loonie fell over to 1.2867 lows vs the dollar.

Meanwhile, US rates were steady as we await tax legislation that is expected on the president’s desk before Christmas while there I still risk in respect to the divides between House and Senate versions of the bill. 

EUR ranges in a sideways 30 pip drift with a bias to the downside after German IP missed badly but the single currency was relatively robust despite the lowest benchmark Bund yield since June. USD/JPY rallied hard to test the 113 handle while GBP/USD also rallied from 1.3379 to 1.3485 the high on harder UK rates that pushed  EUR/GBP over a cliff to end up below the 200 DMA for the first time since May.

Key events in Asia:

  • AU Home Loans (Oct)
  • CNY Trade Balance USD (Nov)

Key notes:

  • Wall Street gains traction, closes higher on improved sentiment
  • US House approves federal government funds through Dec. 22 to avert the government shutdown
  • UK PM May to meet with Juncker & Tusk to finalize Irish border deal - BBC
  • Market wrap: dollar appreciates and risk was on - ANZ
  • Gold: hits $1,245 on legislation to extend funding for the U.S. government



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