Currency Trading Summary

U.S. Dollar Trading (USD) had very quiet trading day with the US away for Presidents day. Risk aversion in Asia and Europe kept the Dollar well supported but the market is awaiting Obama’s speech on Wednesday in which he will outline his new Mortgage Support Plan.  Crude Oil closed up $0.35 ending the New York session at $37.16 per barrel. In the US share markets were closed. Looking ahead, February NY Fed Manufacturing forecast at -24 vs. -22.2 previously. NAHB Forecast to remain at 8 in February.

The Euro (EUR) opened the week under pressure as US futures pointed to downside and Newspapers over the weekend focused on the weakened debt structure of Eastern Europe. Japanese GDP data also added to EUR/JPY selling pressure. Overall the EUR/USD traded with a low of 1.2729 and a high of 1.2859 before closing the day at 1.2790. Looking ahead, German Zew Survey Current forecast to fall to -81 vs. -77 previously.

The Japanese Yen (JPY) strengthened as risk aversion kept the safe haven well supported. Q4 GDP fell -3.3% slowing to its slowest pace since 1974. Initial reaction sent the USD/JPY lower but focus switched to the likelihood that a stimulus package will be announced and the pair rallied off lows. Overall the USDJPY traded with a low of 91.45 and a high of 92.10 before closing the day around 91.90 in the New York session.

The Sterling (GBP) opened sharply lower falling to supports from last week before confirmation that the UK government wasn’t thinking of Nationalizing Lloyds and BoE Member Bean hinted at stimulus measures let the pair rally back to 1.43.  Overall the GBP/USD traded with a low of 1.4150 and a high of 1.4320 before closing the day at 1.4290 in the New York session. Looking ahead, January CPI forecast at -1.0% vs. -0.4% previously. Also Released January RPI forecast to fall -1.5% vs. -1.4% previously.

The Australian Dollar (AUD) kept to the recent range although under pressure as investor sentiment soured. Most analysts believe that for the AUD to rally we need a sustained stock rally and that the current climate doesn’t support such an event.  Overall the AUD/USD traded with a low of 0.6477 and a high of 0.6537 before closing the US session at 0.6510. Looking ahead, RBA minutes released.

Gold (XAU) followed Dollar strength keeping to a very tight range orbiting the $940 level. Overall trading with a low of USD$937 and high of USD$945 before ending the New York session at USD$941 an ounce.