By FXEmpire.com
The currency markets soared on Friday, with the euro dollar almost touched 1.27, on Monday morning it is still trading at 1.2625. Sterling climbed to the 1.57 price, surprising traders while the safe haven JPY held pretty close to even. The commodity currencies climbed along with the overall commodity markets posting their biggest rally for the year, as a long-awaited debt deal in Europe pushed buyers back into a sector that had logged few gains since May. What was destined to close as a poor month turns positive, although most prices were still down for the quarter, not nearly where economists had been expecting.
The weekend saw the release of the Chinese PMI, which met forecast but was still disappointing. The AUD and the NZD were able to hold their gains.
Gold futures rallied more than 3%, as investors cheered a plan by European leaders to stabilize the region’s banks while the US dollar sank adding further support to the precious metal. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,279.51 tons, as on June 29. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,821.45 tons, as on June 29. Money managers have sharply cut their net long position in gold futures and options, as a lack of fresh monetary stimulus by the US Federal Reserve prompted some bullion investors to lessen their bullish bets, as per CFTC data.
European leaders attending a two-day summit agreed early Friday on a plan to use bailout funds to directly aid banks in Spain and Italy. The dollar index, which compares the US unit to a basket of other currencies, dropped to 81.631 from 82.849 on late Thursday.
Copper surged more than 4%, its biggest one day gain since November, as the latest euro-zone rescue deal boosted a broad range of commodity and financial markets with investors scrambling to cover short positions.
Crude oil rose more than 9%, outperforming other leading commodities and overlooking the latest bearish news of weak consumer sentiment. Prices were also supported by strong results at a EU summit and renewed anxiety on Iran.
The Iranian government said it may halt all imports of South Korean goods in response to Seoul’s suspension of all Iranian crude oil imports as of July 1. Imports of crude oil by US from Saudi Arabia climbed 45.7% from a year earlier in April, the highest level since July 2008, according to US government data released last week. Natural gas futures closed higher, finding support from forecasts calling for warm weather and demand from utilities in the coming weeks.
The number of rigs actively exploring for oil and natural gas in the US were down by 7 last week to 1,959. 1,421 rigs were explored for oil and 534 for gas while 4 were listed as miscellaneous, as per Houston-based oilfield services company Baker Hughes Inc.
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