The New Year began in Asia with the Euro getting crushed ahead of PMI manufacturing data that most expected would show that Europe is slipping further into a deep recession, not a great way to celebrate the tenth anniversary of the Euro and the addition of Slovakia as the 16th member of the Euro Zone. The EUR/USD opened near the 1.4000 level and initially popped to 1.4027 before the landslide occurred that sent the volatile pair to a 1.3850 low. The overbought Euro was closer to 1.3870 ahead of the data set to be released at 8:50GMT, 8:55GMT, and 9:00GMT respectively for French, German and Euro Zone PMI. Many see poor performance ahead for the Euro as more rate cuts could be right around the corner. The British Pound opened over a handle higher and then dropped from its 1.4764 highs to levels near 1.4615 as sellers swooped in to take advantage of the higher levels. Rumors persist that down the road the UK will become a member of the Euro Zone, but polls show most Brits are opposed to this. EUR/GBP dropped to 0.9427 from 0.9590 highs earlier in Asia.

USD/JPY churned higher from 90.62 to highs just near 91.17 as the US Dollar enjoys a fine opening day for 2009. Among other favorable Dollar moves was Aussie dropping from 0.7040 to 0.6940, and USD/CHF taking off from 1.0623 to just over 1.0770. The Dollar rally could be short lived however; as many feel that current US interest rates of between 0 and .25% would dampen investor demand for the Greenback.

Upcoming Economic Data Releases (London Session):

1/2/20098:50FRPMI ManufacturingDEC F35.935.9
1/2/20098:55GEPMI ManufacturingDEC F33.533.5
1/2/20099:00ECPMI ManufacturingDEC F34.534.5
1/2/20099:30UKBank of England Credit Conditions Survey2-Jan
1/2/20099:30UKNet Consumer CreditNOV0.8B0.6B
1/2/20099:30UKNet Lending Sec. on DwellingsNOV0.5B0.5B
1/2/20099:30UKMortgage ApprovalsNOV32K32K
1/2/20099:30UKPMI ManufacturingDEC34.433.5
1/2/20099:30UKM4 Money Supply (MoM)NOV F1.20%- -
1/2/20099:30UKM4 Money Supply (YoY)NOV F16.30%- -