Following rumors of an impending merger between Kraft Foods and Cadbury, the Pound made some serious gains against the Dollar with the pair currently trading around the 1.6405 level. EUR/USD trading was relatively stable on Monday largely due to the Martin Luther King Holiday. Currently the pair is trading around the 1.4385 level.
Today, traders will want to pay attention to the TIC Long-Term Purchases report, due at 14:00 GMT. The report measures the difference in foreign investment in the U.S. and U.S. domestic investment abroad. The report is a key indicator of American economic health, as it is a direct indicator of how foreign investors view the U.S. economy.
Heavy volatility among USD pairs usually follows this report. With a forecasted figure of 30.3B, today's long-term purchase figures could mark a significant increase over last month's. If this is indeed the case, the greenback could see some major gains, particularly against the weak Euro. On the other hand, any figure below the predicted outcome would likely see USD take further losses, especially against the strong British Pound.