Bullet Report: US Dollar: Was yesterday’s levels a temporary high for it ?

Today is going to be busier in terms of financial data releases than yesterday. On the agenda is like every Wednesday the Crude Oil Inventories data which reveals the stockpiles in the US, and besides that we will have US New Homes Sales which will help gauge the health of the Housing Sector. Yesterday we had a few notable movers. Oil dropped below $50, the Chinese Yuan dropped to new record lows, and the Sterling Bounced from day’s lows during BoE Governors Speech.

Currencies: USDCNY continues its rising march, reaching 6.78, a price level that definitely helps Chinese exports. Analysts expect this price to now rise over 7, mostly due to the USD Strength. Overnight, AUDUSD jumped to 0.7709 from 0.7645 after data revealed a higher inflation rate, eliminating any chances for a rate cut this year. Overall the USD was strong for most of the day against a basket of currencies, until around 14 GMT where things reversed and the USD was in a selloff mode. Particularly GBPUSD which plummeted to day’s lows earlier, reaching as low as 1.2080 jumped to over 1.22 after BoE Governor did not give any hints on future monetary policy. The EURUSD was steady at $1.0890, after slipping to an almost 8-month low of $1.0848. The USD is supported by rising expectations that the FED will raise rates by year end. The market now prices around 80% chances for that to happen.

Stocks: Overnight, US stocks were lower as the Dow fell 0.30%, while the SP500 declined 0.38% and Nasdaq fell 0.50%. In Asian today, the picture is similar with Shanghai down 0.21% and Australia also almost 2% lower. Stocks in Europe just now, also opened lower in what seems to be a small correction from the consecutive rises that occurred in the last days.

Oil and Gold: Oil prices were yet again under pressure as a report yesterday revealed that there was a surge in US stockpiles, a rising production in Nigeria and no agreement between producers regarding an output cut or not. Crude oil fell below $50 for the first time since Oct. 18, hitting a session low of $49.62, as some traders locked in profits from oil’s climb of more than $5 a barrel, or about 13%, over the past month. Crude oil inventories tonight, will be closely watched for further direction. GOLD prices rebounded yesterday to as high as $1275 on the back of a weaker USD, and a drop in the stock markets.

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