USD Trading Outlook (01-12-2011)

U.S. Dollar Trading (USD) plummeted across all majors and commodities as the world’s central banks joined forces to prompt an epic relief rally. Central banks around the globe announced a co-ordinated plan to ensure cheaper dollar funding for European banks in an attempt to thaw out liquidity channels. Prior to the announcement, China’s PBOC’s 50 basis point cut of its reserve requirement ratio, the first seen since 2008, ensured market sentiment started on the front foot heading into the North American session. Added to this a positive reading in ADP employment seen at 206K (biggest gain in a year) well above the 130K forecast, further gave the market confidence that the Fridays NFP figures may come in positive. US share markets soared on Wednesday with NASDAQ up 4.17%, Dow Jones up 4.24%, and the S&P up 4.03%