Overall: The better-yielders moved higher against the dollar from the open on Sunday until about 03:30 EDT as global equity markets and S&P futures advanced on the expected announcement of the Treasury's plan for buy legacy assets off the bank's balance sheets. Wall Street enjoyed quite a rally, with stocks advancing well over 4% on the news after a brief bout of selling the rumor after the plan was officially announced at 08:45 EDT. Stocks rose right from the start and the higher-yielders followed suit about 30 minutes later, with the best levels of the day being seen about 30 minutes before the close in N.Y.
In U.S. economic news, existing home sales rose 5.1% in February as lower prices lured bargain hunters into the market.
The Euro (Eur/Usd) advanced from the open until about 03:30 EDT, fell until 10:00 EDT, then spent the rest of the day in a strong advance. The high was on 1.3735 and the low on 1.3485.
The Euro-area adjusted trade balance was released at -5.5B in January, less than expected. In January 2009 compared with December 2008, seasonally adjusted exports fell by 16.7% and imports by 8.1%. An analysis of the trade balance over the last year shows that imports rose at a faster pace than exports mainly due to the energy component, which is also the biggest module of the trade balance
The Pound (Gbp/Usd) rose nearly 150 pips during the Asian session, as the dollar was sold across the market and continued its gain until about 07:00 EDT, hitting a high on 1.4648. The pair found a base on 1.4450 about 30 minutes after Wall Street opened, and rose from there to eventually hit 1.4579.
The Aussie (Aud/Usd) hit 70 cents twice overnight, but fell with the euro and pound until about 30 minutes after the start of equity trading in N.Y. From there, the pair rose to multi-week highs, eventually hitting 70.33 cents just as Wall Street was getting ready to close.
The Cad (Usd/Cad) found resistance twice at 1.2370 before declining all through N.Y. as crude advanced nearly $1.80 on the day.
The Swissy (Usd/Chf) fell 80 pips during the Asian session and the move continued throughout most of the trading in N.Y. The pair looked finish the day with a doji on the daily chart, but was looking bearish on the 30 min chart as Wall Street was coming to a close.
The Yen (Usd/Yen) traded on strong momentum overnight. The pair rose 80 pips in the Asian session, to the resistance area of the last two days of trading, but failed to break any higher. From there, the market retraced every gain made earlier, but the yen started to move higher during the London open. The pair reached its peak about 2 hours after Wall Street opened and declined thereafter even as stocks enjoyed their strong advance.
The confidence seen in the Japanese manufacturing sector has fallen by the most in at least five years as the global recession produces record declines in factory outputs and exports. The sentiment seen among manufacturers was a -66.0 which is much worse than the expected -47.3 as well as below the previous number of -44.5. Japan is heading towards its worst recession since 1945 which is forcing businesses to cut spending and reduce workforces.