The US dollar clawed its way back from an 8-month low against the yen, but remains mixed against most major currencies. Data from the S&P/Case-Shiller showed composite index of house prices in 20 metropolitan areas rose 1.6% in July from June. This data brought relief to concerned investors about the impact of a weak housing market on the economy. Data from the Conference Board reported consumer confidence fell to 53.1 in September fueled by worries over personal finances as the US faces the worst job prospects in 26 years.
The stronger dollar support is also attributed to comments from Russia's central bank first deputy chairman saying they had no plans to cut the amount of US Treasuries it holds, and may possibly add Canadian and Australian currencies to their reserves.

The euro weakened vs. the dollar and yen after better than expected Eurozone data. The European Commission's monthly survey reported economic sentiment in the Eurozone rose to 82.8 points in September due to a sharp rise in consumer optimism. In other news, European Central Bank President Jean-Claude Trichet said he backed the argument for a strong dollar in foreign exchange markets. This sentiment was echoed by ECB Governing Council member Ewald Nowotny.

The British pound rallied against the euro and the dollar after a surprise rise in UK retail sales. Data from the Confederation of British Industry showed retail sales in September had its first positive growth since April. The economic woes that resonated throughout the UK for the first half of 2009 was confirmed as Q2 GDP shrank 0.6% as reported by the Office for National Statistics.

The Japanese yen gave back some of its recent gains vs. the dollar after Japan's finance minister backtracked his comments made Monday of tolerating a stronger yen. Today, Japan's Finance Minister Hirohisa Fujii said he would not rule out taking action if currency moves were irregular, but the correct current policy was to not promoting a weak currency.

The Canadian dollar weakened as crude oil prices fell below $66.50 a barrel and Russia's central bank cut interest rates. The interest rate cut from Russia's central bank was a reminder that though a global recovery appears to be taking shape, it is still in a fragile state.

The Australian and New Zealand dollars lost some steam this morning as commodity prices dipped. Overnight the Aussie rallied against the US dollar after talks that the Reserve Bank of Australia may increase interest rates by 25 basis points each in November and December.

EUR/USD1.4598
USD/JPY89.77
GBP/USD1.5994
USD/CAD1.0835
USD/MXN13.5380
USD/CHF1.0343
AUD/USD0.8750
NZD/USD0.7191
USD/DKK5.1100
USD/SEK7.0225
USD/NOK5.8548
USD/TWD32.340
USD/CNY6.8206

10-Year Treasury Note Yield: 3.302%
Dow Jones Industrial Average: 9,775.38 -13.98
This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.