Overall, the dollar was driven by risk-aversion in the last few sessions, helping it post important gains against some of the majors. In tonight’s Asian session, the market returned to its normal pattern of trading, moving without any volume in a 30-pip range even after the huge moves seen just one day before. Ahead, the European session has a very light calendar, only the BoE minutes might influence the market. However, the U.S. session holds some top-tier releases, which will probably move the market from one corner to the other.

The Euro (Eur/Usd) broke under the 1.27 level, the support of the last weeks of trading, and fell 220 pips. The euro was sold lower as Moody’s issued a report, saying that Eastern Europe will have a huge drag over Euro-area. In the Asian session, the euro rose slightly, gaining 30 pips.  

The Pound (Gbp/Usd) fell 160 pips in the Asian session, but helped by the CPI release, the pound managed to close the last day of trading posting a very small decline. The market had a strong reaction to the inflation report, because it does not justify the BoE’s fear that inflation will “undershoot” the 2% target over the medium term.

The Aussie (Aud/Usd) bounced off the 20-day moving average and fell 150 pips. The aussie sold lower all day long, but had a weak attempt in the European session to retrace some parts of the move. In the Asian session, the aussie bounced off the 0.6350 support level, and gained 50 pips.

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) rose 240 pips yesterday, breaking above the 1.25 level for the first time in the last three weeks. Most of the moves came during the Asian and the early European sessions, while it moved virtually flat during the U.S. trading hours. In the Asian session, the cad fell 30 pips.

The Swissy (Usd/Chf) gained 100 pips in the last day trading, even though at one point the pair advanced as much as 180 pips. During the intra-day session, the swissy broke above the 1.17 support area, but did not find the strength to hold above it. In the Asian session, the swissy declined 30 pips.

The Yen (Usd/Yen) formed a double top in the 92.60 region, after testing it twice during the last day of trading. The yen rose yesterday 80 pips, even though the S&P futures headed lower during the trading session. In addition, the link between the two is getting weaker and weaker. The yen touched a one-month high, while equities reached a three-month low.