As feared, commodity prices are firming this morning and the dollar is softing as a result. Part of the rally in commodities is attributable to talk of domestic stimulus by the Chinese while some is buying ahead of the weekly oil inventory data.
Dealers report very light order books today and modest customer interest, making markets more vulnerable to erratic swings. It is August afterall. We used to have months of this sort of price action, so if we only have a few weeks of soggy markets we have little to complain about.
EUR/USD has firmed to 1.4760 and USD/JPY has slipped back below 110.00.
