The Dollar gained versus the Euro and the Pound and weakened versus the Yen as Risk Aversion acted as the catalyst for the Dollar rally. China announced it will cool its economy and markets and U.S President, Barrack Obama, proposed new limitations on Banks' size and risk taking. NASDAQ and Dow Jones fell by -3.61% and -4.12% respectively as Obama's financial plan and uncertainty on Bernanke's 2nd term vote raised economic fears. Crude Oil dropped by -4.5% the past week closing at 74.56$ a barrel and Gold (XAU) declined by -3.4% closing at 1092.50$. Looking ahead, Existing Home Sales are expected weaker on Monday. Fed Chairman, Bernanke, Confirmation Vote on Tuesday is expected to cause many speculations and price movements. FOMC's Interest Rate Decision is expected unchanged with 0.25% on Wednesday. Core Durable Goods Orders are expected weaker on Thursday along with Initial Jobless Claims. 4th quarter GDP will be released on Friday and could have dramatic effects on the Dollar. Major companies such as Microsoft, Yahoo and Apple will release their earnings during the week and could have effect on equity markets.
The Euro weakened by -1.7% versus the Dollar as concern about Greece's debt crisis rose and German ZEW economic sentiment came out weaker showing investors are more pessimistic on the economic outlook. Overall, EUR/USD traded with a high of 1.4413 and a low of 1.4029. EUR/USD has crossed below its 200 day moving average and is trading on a bearish tone in its 4 month lows. A retest to 1.43 that will act as a resistance level is possible. Looking Ahead, GFK German Consumer Climate is expected weaker with 3.2 on Monday. German Ifo Business Climate is expected slightly higher with 95 on Tuesday. Consumer Confidence is expected slightly higher with -15 on Thursday. German Unemployment Change is expected to show 17K more jobs were added.
The Pound weakened by -0.9% versus the Dollar and gained versus the Euro as the Dollar rallied and mixed economic data was released. CPI figures came out stronger than expected along with positive Claimant Count Change and lower Unemployment rate than expected. U.K Budget woes sent the Pound lower and along with weaker Retail Sales helped it cross below its 200 day moving average. Overall, GBP/USD traded with a high of 1.6458 and a low of 1.6077. GBP/USD has crossed below its 200 moving day average and is trading on Bearish territory. The 1.62 support has been breached and the pair is struggling to keep above 1.61. Looking Ahead, the most major economic data will be 4th quarter Prelim GDP on Tuesday which is expected to rise by 0.4% versus -0.2% prior, sharp volatility is expected to follow the release. GFK Consumer Confidence wand Nationwide HPI will be released on Friday.