The Obama Presidency began with an inauspicious start as the DOW had its largest Inauguration Day drop in its 100 plus year history, and the Dollar lost ground in Asian trading against the Euro and British Pound. After hitting a 6 week low of 1.2845 early on, EUR/USD, saw buyers step in, assisted by EUR/JPY reversing from three month lows of 115.27 as US futures turned positive and risk aversion cooled. The EUR/JPY pair eventually hit just near 117.20 before cooling off at 116.60 levels in the waking hours of London. The EUR/USD topped out at the 1.3018 levels as stop loss buying helped accelerate the move. Traders were positioning themselves ahead of ECB President Trichet who was scheduled to speak later in the European session. Many see the ECB as lagging other central banks in aggressive rate cutting, and recent murmuring of the possibility that the Euro currency may not survive much longer in its current form look to gain footing and will surely take its toll.

The British Pound hit an early session low of 1.3813 that also represented a fresh 7 ½ year low for the GBP/USD, but that was reversed on short covering in a clearly thinned market. The UK has hit some rough waters of late as investors seem to be fleeing from the British Isles in droves, that sentiment could continue with UK employment data as well as BoE minutes later in the day.

USD/JPY broke the 90.00 level today, falling to 89.67 before reversing with US equities futures. Traders are hesitant to be long Yen in lieu of President Obama pledging swift action to help the bleeding US economy, as they do not want to be on the wrong side of a trade if a new sweeping plan is unveiled.

Keep an eye on the below noted data later in the day as well as what President Obama's first day will bring. I'm pretty sure that no one will sleep better tonight than former President George W. Bush…..

Economic Indicators Update