Dismal U.S. economic news continued to dominate this week culminating with Friday's announcement that the U.S. lost 533,000 jobs. This number was about 200,000 over the average guess and the worst number since 1974. Although the number was worse than expected the Dollar was able to maintain its stability along with the other major Forex markets. The U.S. stock markets closed lower for the week, but for the most part seemed to be attracting buyers on breaks. This trading action helped risk sensitive currency markets like the Australian Dollar and New Zealand Dollar.

Two central banks cut their key interest rates during the week. The European Central Bank dropped its rate by 75 basis points to 2.50% and the Bank of England cut its borrowing rate by 100 basis points to 2%. Both rate cuts disappointed traders who were looking for more aggressive cuts. The move by the ECB was followed by very little commentary by ECB President Trichet. This aggravated traders who wanted to know a little more about the ECB's monetary policy moving forward. Without a game plan for future cuts, banks are expected to refrain from normal lending practices. The Bank of England's rate cut decision was met with both concern and confusion. In November the BoE cuts rate an unexpected 1.5%. At that time the market thought it indicated a major shift in monetary policy that would allow the U.K. economy to recover from its recession at a much faster pace. All the current rate cut did was indicate that the BoE would have to cut rates again early next year. Speculation is building that both the ECB and the BoE would move rates to 0% in 2009.

The rise in the Japanese Yen continued to concern Bank of Japan officials. Friday's rally in the stock market gave the Bank of Japan some relief. This market is coming dangerously close to the level where the Bank of Japan will intervene. Not only are they expected to heavily sell the Yen, but they are going to flood the money supply with currency. This move will be different than it made years ago when it settled only on intervention. Every gain in the Yen causes a decline in exports which leads to lower profits for powerful Japanese corporations like Canon, Toyota and Hyundai Motors. The BoJ is prepared to do what is necessary to stop the rise in the Yen. Be prepared for the upcoming volatility.

News that the Swiss economy contracted again in the third quarter hurt the Swiss Franc. Traders are now anticipating another interest rate cut by the Swiss National Bank on December 11. There was talk of Swiss traders repatriating funds back to Switzerland but that talk ended quickly with the release of the poor U.S. jobs data. Friday's rally in the USD CHF was a sign that the market still thinks the U.S. Dollar is a safe haven investment.

The USD CAD surged to the upside. The Canadian economy is fighting a battle on two fronts: lower commodity prices and political uncertainty. The slowdown in demand and the continuing threat of deflation is hurting the prices of key Canadian exports such as gold, crude oil and lumber. This decline in demand is slowing economic growth which will lead to a 50 basis point interest rate cut by the Bank of Canada on December 9. In addition to the falling commodity prices and the slowing economic growth, there is pressure mounting because of the possibility Prime Minister Harper will be voted out of office by the Parliament. Harper is even threatening to suspend Parliament to stave off defeat from the opposition party. The poor performance by the economy and the political uncertainty should keep the upside pressure on the USD CAD. The U.S. Non-Farm number may provide some support to the Canadian Dollar, but the longer-term trend is still down.

The Australian Dollar gained ground against the Dollar on Friday. The Aussie is still reacting positively to the 1% interest rate cut by the Reserve Bank of Australia earlier this week and the series of interventions during November. Traders may be afraid to sell the Aussie at current levels. Although the domestic economy is expected to weaken further, traders seemed to be more interested in the higher yielding assets in Australia instead of the economic news. The Aussie could rise if trader appetite for risk increases.

The NZD USD traded higher on Friday after the U.S. stock market rallied. This is a sign that traders will buy the New Zealand Dollar if there is strength in equities or commodities. Although the New Zealand economy is in a recession, many investors feel the worst may be over as aggressive rate cutting activity by the Reserve Bank of New Zealand has put the economy in a position to recover. Look for a rally if trader appetite for risk increases.

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DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.