The Japanese yen rose to an eight month high of 88.22 versus the greenback gaining over 400 pips from last week fueled by Japan's finance minister's comments.

  • Hirohisa Fujii in the recent past was reported saying that Tokyo would not intervene to stem its fresh rise.  However, today, Fujii insisted he never said he would not act in the face of a rising yen spurring fears that Japan would move to weaken the yen for the first time since 2004.  The USDJPY rose back towards the 90-level.
  • ECB President, Trichet, spoke on the economy yesterday saying that a stronger USD is important for the global economy.  He also stated that there is no need to rush into exit strategies from current policies that are aiding the fragile economic recovery.  Trichet and Nowotny join other central banks, Switzerland, Japan and Canada, in favoring a stronger US dollar as an important element for the global economy.
  • The Dollar Index, which tracks the USD against 6 major currencies came off its one-year low of 75.83 to 77.26 and could be heading towards a resistance level at 77.66 in the short-term.

Currency to watch out for: EURUSD & GBPUSD

  • The EURUSD pivot point is at 1.4590 with a preference to enter into long positions at 1.4600
  • The GBPUSD pivot point is at 1.5850 with a preference to enter into long positions at 1.5860

Today's calendar and market movers:

  • UK Final GDP expected to rise to -0.6%
  • EU Consumer Confidence expected to rise to -21
  • US House Price Index expected to rise to -14.3%
  • US Consumer Confidence expected to rise to 57.0

Stocks:

  • US stocks rallied on Monday, breaking a three-day losing streak on the back of mergers and acquisitions in the technology and health-care sectors.  The Dow close +1.3%, the S&P +1.8% and the NASDAQ +1.9%
  • As of 06:40 GMT the Nikkei is trading at +0.91% and the Hang Seng at +2.25