Daily Market Review – Asian Session – Gold breaches USD1,500 to reach a new all-time high

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The Euro gained significant ground against the US dollar during the Asian trading session, reaching a new 15-month high at 1.4581. The EURUSD pair was lifted due to the weakening of the greenback, based on concerns of the US debt. Despite the ongoing Eurozone debt crisis, EURGBP rose as well in Asian trading, making up for losses from the earlier session to gain 28+ pips peaking at 0.8874.

 

Sterling rose against the weaker US Dollar, despite Wednesday’s dovish comments by the Bank of England, indicating that an interest hike might not be seen in the near future. GBPUSD hit a new month high of 1.6447. Cable opened the Asian session at 1.6400 and dipped briefly to 1.6385. However, the Pound weakened against the Japanese Yen, dropping down to 134.90 from the opening level of 135.08.

 

The Australian Dollar surged to its highest level in 29 years, aided by the rise in commodity prices. The AUD is traditionally tied to commodity prices, especially gold. Since the precious metal hit an all- time high today, the Aussie rose, also underpinned by carry trades where investors invest in high yielding assets such as the Australian currency. Some positive data were released, showing Australian Producer prices rose 1.2 percent in the first quarter which might give some indication of next week’s CPI report. AUDUSD gained 95 pips to hit 1.0770.

 

The Japanese Yen gained against the US Dollar, with the USDJPY pair touching a low of 82.15. The greenback is broadly weaker against most currencies, reaching its lowest in three years, due to increasing concerns regarding the US debt burden and the recent S&P downgrading. Meanwhile, the Yen rallied against the Euro in the Asian session, trading in a range after Euro rose to a week high yesterday hitting 120.38. EURJPY traded around 119.80.

 

 

Gold rallied above USD1,500 an ounce today, making a new all- time high, boosted by investors increased demand for the safe haven asset during uncertain economic times. In addition to the European debt crisis, the recent Standard and poor’s downgrading of the US credit rating sparked concerns of whether one of the world’s largest economies will default on its debt. Traditionally, the price of gold and the greenback have an inverse relationship. During the Asian session, spot gold gained over 60 pips to peak at USD1,508.13.

 

EURUSD USDJPY GBPUSD AUDUSD EURJPY GOLD
OPEN 

(21:00 GMT)

1.4510 82.36 1.6400 1.0679 119.52 1501.99
DAY’S HIGH 1.4581 82.58 1.6447 1.0770 120.02 1508.13
DAY’S LOW 1.4504 82.15 1.6385 1.0675 119.46 1498.38
CLOSE 

(06:00 GMT)

1.4566 82.23 1.6431 1.0742 119.79 1505.84