General Commentary
Last week’s currency trading review
The Dollar the dollar enjoyed good gains with economic data improving and the Euro crisis continuing weigh on the biggest major. The market is still viewing the USD as a safe haven but if this correlation changes then a US recovery could lead to strong US data causing a strong Dollar. On Friday we saw glimpses of this with December NonFarm payrolls beating estimates at 200k vs. 150k forecast. The Unemployment rate also dropped to 8.5% vs. 8.7% forecast. The Euro harbored most of the action last week with a positive first couple of days leading into heavy selling later in the week to fresh 12 month lows. Yields on Italian and Spanish debt crept higher and concerns that Hungary would need a big bailout and Greece might be forced to leave the Eurozone hurt sentiment. Support at 1.2860 broke on Thursday and the Pair fell below 1.2700 on Friday. The EUR/USD is down -1.76% currently at 1.2718, after opening the week at 1.2942.
The Japanese Yen was fairly unchanged against the USD with most of the gains against the Euro and GBP. The EUR/JPY has drawn a lot of attention after breaking Y100 and plumbing fresh daily lows. The outlook is weak going forward and this is prompting the BOJ to mention the cross specifically as one-sided moves that should be avoided. The USD/JPY is up 0.13% currently at 76.96, after opening at 76.86. The GBP fell heavily later in the week but still did well against the Euro with the EUR/GBP falling to multi year lows under 0.8300 and opened up the major downside target at 0.8000. The GBP/USD is down -0.69% currently at 1.5425 after opening at 1.5531. The AUD held up well in the Euro sell off ending roughly unchanged with the good economic data and strong stock market helping underpin. EUR/AUD has slipped to all time lows with the cross now under 1.2500 and showing no signs of stopping. Strong Oil and Gold is also supporting. The AUD/USD is up 0.17% currently at 1.0226 after opening at 1.0209.
The Forex Trading Economic Data Ahead Preview
In the States; On Wednesday, Fed’s Beige Book released. On Thursday, December Retail Sales forecast at 0.2% vs. 0.2% previously. Weekly Jobless Claims forecast at 370k vs. 372k previously. November Trade Balance forecast at -44.9bn vs. -43.5bn previously. Jan UoM Consumer confidence forecast at 70.4 vs. 69.9 previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; On Wednesday, German GDP forecast at 3.0% vs. 3.6% previously. ON Thursday, December CPI forecast at 2.1% vs. 2.1% previously. Also on Thursday, ECB rate announcement forecast at to hold at 1.0%. Also ECB Press Conference. In the UK, on Wednesday, Nov Trade Balance forecast at -8350 vs. -7557mn previously. On Thursday, BOE Rate announcement forecast unchanged at 0.5%. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; No major data. In Australia; On Monday, November Retail Sales forecast at 0.4%. We will provide our previews and reviews of these data releases in the daily summary.
