The USD gained against most of its major counterparts due to trade tensions between the U.S. and China over the weekend.
- This week's opening session is Asia gave way to dollar and yen strength on speculation trade protectionism between the US and China will increase, putting the relative safety of the two currencies back in play.
- The greenback gains from risk aversion because it is the world's main reserve currency. While the Japanese yen benefits from financial turmoil because the nation's trade surplus means the country does not have to depend on overseas lenders.
- Crude oil fell over 1.8% on speculation the black commodity's rally to over $72 a barrel last week outpaced the global economic recovery. Gains by the US dollar and a drop in oil prices snapped a two-day advance for gold draining demand for the metal as an alternative investment.
- Today, US President Obama is due to deliver a major speech at the Federal Hall on the financial crisis to mark the collapse of Lehman Brothers. A year ago tomorrow Lehman's filing for bankruptcy, aided a global financial crisis that led to more than $1.6 trillion in losses and write downs by financial institutions.
- Since then the world has witnessed unprecedented government interventions in banking, insurance and auto industries. In his speech he is expected to outline his plan for unwinding government involvement in the financial sector and to make a case that a new system of rules is required to prevent a market crisis.
Currency to watch out for: EURUSD & AUDUSD
- The EURUSD pivot point is at 1.4600 with a preference to enter into short positions at 1.4590
- The AUDUSD pivot point is at 0.8625 with a preference to enter into short positions below 0.8625
Today's calendar and market movers:
- Switzerland PPI month on month expected to rise to 0.1%
- EU Industrial Production month on month expected to rise to -0.3%
Now onto Stocks:
- US stocks broke a five-day winning streak on Friday but have posted solid gains for the week. The three major indexes finished lower 0.1% to 0.2%.
- As of 06:00 GMT the Nikkei is trading at -2.25% and the Hang Seng at -0.94%