The US equities markets have opened up today putting pressure on the greenback but these stocks gains could not hold as the disappointing release of June US consumers confidence survey is still in the investors' minds and is not out of the current market sentiment affecting negatively on the risk appetite. Dow could just keep 57 points of gains at its closing.

US June ADP employment came worse than the market expectations of -411k at -473k which increased the market readiness of further lost jobs to be shown today with the release of June US non-farm payrolls which are expected to be -368k jobs with an increasing of the US unemployment to 9.6% but we have seen today too an improving of May US ISM manufacturing index to 44.8 from 42.8 and it was expected to be 44 and as we have mentioned in the recent analysis, the market has focused on the price paid index which came at 50 to push the gold up as the increased inflation pressure in the manufacturing sector in May as the market was waiting for just an increasing to 46.7.

The gold which was struggling to stand above 940$ has suffered recently from the easing of oil and commodities prices and the correction of the stocks market in the recent 2 weeks which underpinned the greenback and downplayed the inflation upside risks which came tamed negatively impacted by the recessionary pressure in May. The gold came under strong pressure after sliding from 960 to be under further technical pressure to drove it down below 942.8$ to reach a new low at 912.8 after its previous low at 925.88 before rebounding to 948 but it could not even close above 940 which has been taken out hardly today. The gold should face a difficulty again to get above 948 to retest 960 as a resistance.

The single currency could not find enough support from the equities market gains and the improving of the investors' risk appetite today to get above 1.42 before tomorrow has suffered too versus and it is still unable to stand above 1.41 in spite of the optimistic consuming confidence figure of June which came at -25 from 28 in May giving some support to the single currency as it was expected to get worse to -30 which helped the European stocks in the beginning of this week. The single currency was little changed today after the release of EU Manufacturing PMI of June was expected to improve to 42.4 from 40.7 in May and it has come at 42.6 as the main market focusing is expected to be on tomorrow ECB interest rate decision meeting and the Trichet's press conference after it after its decision last week to extend its lending offering to the European countries to 442Bln Euros for one year in another extra easing decision to help the struggling European economy.

The British pound is still under the pressure of UK GDP Q1 final reading which was expected to decline quarterly by 2.1% and yearly by 4.3% and it has come at -2.4% q/q and -4.9% y/y. The cable could reach a new year high by the release of the data at 1.6743 before falling below 1.64 with the disappointing release of June US consumers confidence survey even the release of June UK CIPS manufacturing index which came at 47 and it was expected to be 46.6 from 45.5 in May has not make a major change of the cable.

Best wishes
 
FX Consultant

Walid Salah El Din
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