Forexpros Weekly Wrap-Up 23 November 2012

Closing the Week with Forexpros

by Forexpros Staff

U.S. stocks finished higher on Friday on hopes Black Friday sales will come in strong this year end.

Trading was shortened in wake of the Thanksgiving holiday.

At the close of U.S. trading, the Dow Jones Industrial Average rose 1.35%, the S&P 500 index was up 1.30%, while the Nasdaq Composite index was up 1.38%.

Hopes that consumers will spend more this holiday season rose on the so-called Black Friday, the Friday after Thanksgiving when U.S. consumers traditionally kick off their holiday shopping.

Many retailers opened on Thanksgiving Day to get a jump on the competition, which brought in the buyers in U.S. bourses Friday, with technology and large-cap stocks faring particularly well.

Improving German business confidence numbers sent shares rising as well.

In Europe earlier, the German Ifo Institute reported that its index of business confidence jumped to 101.4 in November from 100.0 in October, beating expectations for a decline to 99.5.

The data came in the heels of a report revealing that Germany’s manufacturing purchasing managers’ index climbed to 46.8 in November from 46.0 in , beating out market forecasts for a 45.9 reading.

Germany’s month-on-month gross domestic product grew 0.2% in the third quarter, in line with expectations.

The broader eurozone’s manufacturing purchasing managers’ index rose to 46.2 for November from 45.4 in October, above expectations for a reading of 45.6.

Leading Dow Jones Industrial Average performers included Hewlett-Packard, up 4.19%, Microsoft, up 2.78%, and Cisco Sytems, up 1.95%.

The Dow Jones Industrial Average’s worst performers included Johnson & Johnson, down 0.11%, Unitedhealth Group, which was up 0.64%, and Pfizer, up 0.66%.

European indices, meanwhile, finished higher.

After the close of European trade, the EURO STOXX 50 rose 0.87%, France’s CAC 40 rose 0.87% as well, while Germany’s DAX 30 finished up 0.89%. Meanwhile, in the U.K. the FTSE 100 rose 0.49%.

Forex

The dollar softened against the world’s major global currencies on Friday amid a risk-on trading session after German business confidence figures beat expectations, which enticed investors out of the safety of the greenback.

Black Friday — the Friday after the U.S. Thanksgiving holiday — kicked off, and market participants were hoping U.S. consumers will turn out in healthy numbers this season, which sent stocks rising and the dollar falling as investors took on risk.

In U.S. trading on Friday, EUR/USD was up 0.69% at 1.2974.

Hopes that the International Monetary Fund and E.U. policymakers will free up pending aid for Greece bolstered the single currency and brought the greenback as well.

Meanwhile, the greenback was down against the pound, with GBP/USD trading up 0.62% at 1.6036.

The dollar was down against the yen, with USD/JPY trading down 0.11% at 82.38 and down against the Swiss franc, with USD/CHF trading down 0.73% at 0.9282.

The dollar was down against its cousins in Canada, Australia and New Zealand, with USD/CAD trading down 0.53% at 0.9920, AUD/USD up 0.67% at 1.0461 and NZD/USD trading up 1.06% at 0.8246.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.76% at 80.22.

The yen was weaker against all other major currencies.   In U.S. trading on Friday, EUR/JPY hit 106.94, up 0.64% and up from a low of 105.72 and off a high of 106.98.

The pair sought to test support at 105.72, the earlier low, and resistance at 106.98, the earlier high.

Elsewhere, the euro was up against the pound and up against the Canadian dollar, with EUR/GBP trading up 0.08% at 0.8091 and EUR/CAD trading up 0.17% at 1.2871.

Gold

Gold prices rose in U.S. trading on Friday after German confidence data beat expectations and sparked demand for risk, which came at the greenback’s expense.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery were up 1.33% at USD1,751.15 a troy ounce, up from a session low of USD1,727.95 and down from a high of USD1,752.45 a troy ounce.

Gold futures were likely to test support at USD1,727.95 a troy ounce, the earlier low, and resistance at USD1,752.45, the earlier high.

Gold and the dollar trade inversely from one another, and solid data out of Germany sent the euro rising and the dollar falling amid a risk-on trading session, a recipe for climbing gold prices.

Elsewhere on the Comex, silver for December delivery was up 2.20% and trading at USD34.085 a troy ounce, while copper for December delivery was up 0.91% and trading at USD3.528 a pound.

Oil

Crude oil futures rose in U.S. trading on Friday after German business confidence data came in better than expected, fueling hopes the European economy may see better days ahead and demand more fuels and energy going forward.

Protests across Egypt spooked investors on fears unrest instability in the Mideast could threaten supply.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at USD88.13 a barrel on Friday, up 0.86%, off from a session high of USD88.52 and up from an earlier session low of USD86.75.

Stronger economic data out of Germany sparked demand for crude on sentiments the European economy may be on the mend somewhat and will need more fuels and energy in the future.

Oil also rose on fears Mideast unrest could escalate into a regional, multiplayer military campaign and disrupt global supply.

Egyptian President Mohammed Morsi gave himself sweeping new powers, which drew supporters and opponents clashing in the streets across the country days after a cease fire was declared between Israel and Hamas militants in the Gaza Strip.

On the ICE Futures Exchange, Brent oil futures for January delivery were up 0.45% and trading at USD111.05 a barrel, up USD22.92 from its U.S. counterpart.