The Japanese yen rose against all of the 16 major currencies after China reported some disappointing news.
- Chinese reports showed industrial output grew less than expected and also said that producer and consumer prices both dropped.
- The Bank of Japan left the interest rate at 0.1% and said that it remains concerned about downside risks to economic activity and prices even as the economy shows strong signs of recovery.
- The main event this week is the FOMC meeting, with the member's decision to be announced tomorrow.Â Investor are waiting to see a shift from the negativity from Bernanke and his colleagues to a more upbeat view on the economy orÂ at least aÂ neutralÂ stance.Â Also many are looking for the Fed to explain an exit strategy.
- Wall Street slides after a four-week rally that took the S&P to a 10-month high on Friday.Â Losses in the dollar were tempered by speculation that upcoming US reports will provide more evidence for a recovery.Â The Canadian dollar collapsed on weaker equity markets and falling oil prices for the third straight day.
Currency to watch out for: EURUSD & GBPUSD
- The EURUSD pivot point is at 1.4210 with a preference to enter into short positions at 1.4200
- The GBPUSD pivot point is at 1.6580 with a preference to enter into short positions at 1.6570
Today's calendar and market movers:
- Canada Housing Starts expected rise slightly to 143,000
- US Wholesale Inventories month on month expected to drop to -1.0%
- US stocks closed lower on Monday with the Dow, S&P and NASDAQ down between 0.3% and 0.4%
- As of 06:30 GMT the Nikkei is at 0.6% and the Hang Seng 0.41%