U.S. Dollar Trading was stronger against the majors

CURRENCY TRADING SUMMARY
U.S. Dollar Trading (USD) was stronger against the majors in the overnight foreign exchange trading session as US retail sales grew more than expected. US retail sales increased 1.0% in November when analysts expected a 0.2% gain. Market is now reflecting a 20% chance that the Federal Reserve will cut rates by 0.25% in the first quarter of 2007. In other markets, the Dow Jones index rose 1pts and the NASDAQ rose by just under 1pt as a cut in interest rate expectations seems to have been pushed back after the strong retail sales figures. Crude oil rose US42c to US$61.44 a barrel as OPEC ministers meet on Thursday to discuss production cuts. Looking ahead, initial jobless claims for the week are due out tonight. 

The Euro (EUR) traded within a low of 1.3193 and a high of 1.3287, before closing at 1.3203 in the New York session. On the data front, the ZEW survey came in at -19 compared to a -25 estimate. 

The Japanese Yen (JPY) traded within a low of 116.67 and a high of 117.59 versus the dollar, before closing at 117.53 in the New York session. Looking ahead, the Tankan survey is due out tomorrow. 

The Sterling (GBP) traded within a low of 1.9607 and a high of 1.9726, before closing at 1.9658 in the New York session. On the data front, unemployment came out at 5.5% beating estimates of 5.6%. Looking ahead, retail sales are due out tonight.

The Australian Dollar (AUD) traded within a low of 0.7851 and a high of 0.7893, before closing at 0.7863 in the New York session.

Gold (XAU) increased by US30c to US$633.20 an ounce in response to a firmer oil price. 

Euro 1.3210
Initial support at 1.3192 (61.8% retracement of the 1.3130 to 1.3293 advance) followed by 1.313 (Dec 11 corrective low). Initial resistance is now located at 1.3293 (Dec 12 high) followed by 1.3368 (Dec 4 trend high).

Yen 117.45
Initial support is located at 116.65 (Dec 13 low) followed by 116.17 (Dec 11 low). Initial resistance is now at 117.81 (61.8% retracement of the 119.90 to 114.43 decline) followed by 118.48 (Nov 17 corrective high).

Pound  1.9670
Initial support at 1.9575 (Dec 12 low) followed by 1.9463 (38.2% retracement of the 1.8838 to 1.9849 advance). Initial resistance is now at 1.9759 (76.4% retracement of the 1.9849 to 1.9466 decline) followed by 1.9849 (Dec 1 high).

Australian Dollar  0.7860
Initial support at 0.7811 (38.2% retracement of the 0.7614 to 0.7933 advance) followed by 0.7769 (Former resistance from Nov 1). Initial resistance is now at 0.7933 (Dec 8 trend high) followed by 0.799 (Mar 8, 2005 high).

Gold  627
Initial support at 623.4 (Dec 11 low) followed by 614.8 (Nov 17 reaction low). Initial resistance is now at 638.1 (Dec 8 high) followed by 650.2 (Dec 1 high).