USD rebounded from 3 year lows and US crude slid more than 1% today on the back of news that a US-led operation killed Osama bin Laden in Pakistan. USD/AXJ has witnessed passive trading due to the plethora of public holidays around the region but it has been a different situation for major pairings which have been buffeted by various news.
The massive 12% fall in the Silver price saw the USD surge especially against the AUD but the move was short lived as players targeted a massive option barrier at 1.10. Once this target was expunged AUD/USD quickly fell back. The Osama Bin Laden news saw traders buy risk first off but it turned into a USD move with the greenback bought and all its highly correlated markets sold accordingly. The EUR rose 0.2% to $1.4862, edging towards 17 month high of $1.4880 hit last week.
AUD extend gains to a fresh 29 year high above $1.1. With both the Fed and the BoJ maintaining ultra loose monetary policies, investors have been seeking higher yielding assets in many fast growing emerging markets in Asia. AUD jumped back from initial losses triggered by an amazingly sharp fall in silver that had prompted traders to sell high flying commodity currencies, though some market players see the risk of more turbulence in commodities and a rebound in the USD. Dealers said that the sharp fall in silver served as a reminder of how a reversal in positioning can cause massive swings. AUD/USD opened the session trading at 1.0968 and jumped as high as 1.1009.
USD slipped to a fresh 1 month low against the JPY of 80.99 as traders tried to trigger stop loss orders around 81.00. But analysts said that some players are ready to buy the USD above 80.91, the 50% retracement of its rise from record low of 76.33 to a high of 85.51 hit in early April.
Silver prices fell by 7% today, the biggest loss since December 2008, with spot prices sliding to as low as $42.44 an ounce from an opening price of $47.81. Also gold prices fell 1.1% to 1539.9 an ounce, after earlier touching an all time high of 1575.7.