Overall: The market had a sudden swing after the London open, with the major currencies advancing against the dollar, but these moves soon reversed. The dollar advanced in N.Y. ahead of the release of the FOMC meeting minutes from the Jan. 27 & 28 meeting as stocks moved between gains and losses on the day.


In U.S. economic news, housing starts fell to a record low in January as the economy slowed and credit remained difficult to get. Starts fell 17% to a 466,000 annual rate, the Commerce Department said. Building permits, a measure of new construction, dropped 4.8% to 521,000. Also, Industrial Production declined in January for the sixth time in the past seven months as the global economic slowdown deepened. Production fell 1.8% after declining by a downwardly revised 2.4% in December. Capacity Utilization fell to 72%, the lowest since February 1983, from 73.3% in December.


The Euro (Eur/Usd) advanced 70 pips in the early part of the European session and tried to break above the high reached during yesterday’s U.S. session. However, the pair failed to complete the move, and moved lower, in-line with the rest or the majors. The euro fell soon after Wall Street began trading, hitting a low on 1.2513, before making some recovery.


The Pound (Gbp/Usd) tumbled almost 150 pips in the European session. The selling frenzy started shortly after the London open, even though in the minutes before, the pair rose 60 pips near the 20-day moving average. As with the euro, the pair fell as Wall Street opened, but it recovered as stocks rose off their lows and was basically unchanged late in the session.


The BoE’s minutes from the meeting held at the beginning of February shows that the committee had, for a second consecutive meeting, a split vote. Eight members voted for a 50-basis rate cut, while one, Mr. Blanchflower, proposed a 100-basis point rate cut, as was the case at the January meeting.


The Aussie (Aud/Usd) retraced some parts of the moves made yesterday, when the aussie was sold. The pair advanced 50 pips during the Asian trading hours, and traded mostly flat in the European session. The pair fell with the pound and euro at the Wall Street open, but had recovered most of the loss towards the end of the session.


Australian retail turnover in the fourth quarter, adjusted for inflation, rose 0.8 percent in the third quarter. This is slightly lower than the 1.0 percent that analysts had been expecting. The Australian MI leading index came in at a -0.4 percent month over month after a -1.0 percent decline was seen on the previous figures reading. The fall in the leading index has shown that the economy has gained some footing during December.


The Cad (Usd/Cad) traded on weak momentum in the Asian session. The cad extended the range seen yesterday, in the U.S. session, unable to produce any significant moves. The pair traded within a tight range in N.Y. as crude ended up little changed on the day.


The Swissy (Usd/Chf) tried, in the Asian session, to break below the low reached on Tuesday, but failed to do so. During the European session, the pair broke above the neutral pivot point, which, until then, had been a resistance line, and gained around 30 pips. After reaching a peak on 1.1825 about two hours after Wall Street began trading, the pair spent the rest of the session in decline


The Yen (Usd/Yen) tested, in the early European session, the 92.60 area, but did not manage to break higher. The pair also topped yesterday at the same area, even though it tested it twice during intra-day. Tonight, the Bank of Japan is expected to announce its latest monetary policy decisions. The pair rose steadily in N.Y. as stocks fluctuated, hitting resistance at 93.95 to reach its highest intra-day price since Jan. 07.