Last week's currency trading review
The Dollar a large rally in US stocks saw some stabilization and retracement in the markets after heavy falls were seen the week before. The Eurozone Debt Crisis still creating market moving headlines but seems to have stabilized for the time being. News that the North Korea leader had died tempered risk appetite as the failed nuclear state began the transition to new leadership. Stocks in the US rebounded as economic data improved in particular Weekly Jobless Claims which fell for a 3rd week to 364k vs. 376k forecast. The Euro the introduction of the new ECB lending vehicle to banks was introduced on Wednesday and lent over 400bn to banks in a much higher than expected take up. Initial gains were sold however as Bond yields fell only marginally and some analysts suggested that the money was not going to be used to increase bank lending or buy European debt. The new ECB President Draghi was quit candid as he described the threats to the Eurozone, but reiterated his belief it would survive the crisis and was a lot stronger than speculators doom scenarios. The EUR/USD is up 0.08% currently at 1.3047, after opening the week at 1.3037.
The Japanese Yen USD/JPY grinded higher as risk appetite came back into the markets and US economic data improved. Resistance at Y78 was broken and Y78.30 is being tested. The outlook since the BOJ intervened has improved markedly for the USD/JPY as the Japanese economy struggles to recover. The USD/JPY is up 0.32% currently at 78.03, after opening at 77.78. The GBP was able to enjoy strong gains for most of the week before faltering on Friday and giving up a substantial chunk of the move higher. EUR/GBP selling saw the important cross test 0.8300 but this also rebounded into the close on Friday back to 0.8360. The GBP/USD is up 0.25% currently at 1.5582 after opening at 1.5543. The AUD was able to break above 1.0000 on Tuesday's 300 point Dow Jones Rally and we saw 1.0200 tested later in the week in a positive return for the risk and commodity currency. RBA minutes from the December meeting showed that the European crisis was the main reason the central bank cut rates and that the local economic data did not support rate cuts. The AUD/USD is up 1.73% currently at 1.0143 after opening at 0.9968.
The Forex Trading Economic Data Ahead Preview
In the States; On Monday, Bank Holiday. On Tuesday December, CB Consumer confidence forecast at 58.5 vs. 56.0previously. On Thursday, Weekly Jobless Claims forecast at 370k vs. 364k previously. Also December Chicago PMI forecast at 60.4 vs. 62.4 previously. On November Pending Home Sales forecast at 1.4% vs. 10.4% previously. We will provide our previews and reviews of these data releases in the daily summary.
In the Eurozone; ON Thursday, December German CPI forecast at 0.8% vs. 0.0% previously. In the UK, On Friday, December Nationwide HPI forecast at 0.3% vs. 0.4% previously. We will provide our previews and reviews of these data releases in the daily summary.
In Japan; On Tuesday, BOJ Meeting Minutes. ON Wednesday, December Core CPI forecast at -0.2% vs. -0.1% y/y. Also released, November Industrial Production forecast at -0.7% vs. 2.2% previously. In Australia; On Friday, December Private Sector Credit forecast at 0.3% vs. 0.2% previously. We will provide our previews and reviews of these data releases in the daily summary.
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