Dollar was sold off earlier today on risk appetite and remains soft in early US session. Japanese yen follows and is broadly lower against major currencies. Sterling is the bigger winner today, as a report showed that businesses are becoming optimistic about prospects of 2010. Euro is also helped by rebound in EUR/CHF on comments from SNB official about intervention. Gold soars above 1160 level today and is now consolidation earlier gains while crude oil rose to as high as 83.95, just shy of 84 level. Stocks in US is set to follow global equity rally and open higher and the development will probably give some pressure to the greenback in near term.

A report from Grant Thornton and Experian said a net 16 percent of unlisted UK companies surveyed are confident about their prospects for 2010, up from net minus 47 percent a year earlier. Sterling is given a mild boost and recovers against Euro after EUR/GBP edged higher to 0.9025 earlier today.

SNB president Hildebrand said that the bank will seek to prevent excessive appreciation of the Swiss Franc and the bank will monitor foreign-exchange market developments very closely., The comments raised some speculations that SNB is ready to act to intervene if Swissy continues to fall against Euro. EUR/CHF recovers after dipping to 1.4722.

Dollar is sharply lower as global stocks are broadly lifted by surprisingly strong China trade data. Exports in China jumped nearly 18% in December after 13 months of decline. Aussie will likely remain most benefited from China's recovery on its trade relationship. EUR/AUD dives to as low as 1.5522 before recovering. Short term outlook in the cross remains bearish for 2007 low of 1.5472 and break of 1.5967 resistance is needed to be the first signal of stabilization.

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GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5921; (P) 1.6015; (R1) 1.6116; More

Intraday bias in GBP/USD remains on the upside further rise could be seen to 100% projection of 1.5829 to 1.6327 from 1.5896 at 1.6304 as correction from 1.5892 continues. Nevertheless, upside should be limited below 61.8% retracement of 1.6875 to 1.5829 at 1.6475 and bring resumption of the whole fall from 1.6875. On the downside, below 1.6067 minor support will turn intraday bias neutral first. Further break of 1.5896 will indicate that fall from 1.6875 is possibly resuming for 1.5706 key cluster support.

In the bigger picture, we're still favoring the bearish case that medium term rebound from 1.3503, which is is treated as a correction to down trend from 2.1161, has completed at 1.7043. Firm break of 1.5706 cluster support (38.2% retracement of 1.3503 to 1.7043 at 1.5691) will confirm this case and indicate that whole down trend from 2.1161 is likely resuming for a new low below 1.3503.

However, note that sustain break of 61.8% retracement of 1.6875 to 1.5829 at 1.6475. will in turn indicate that whole fall from 1.6875 has completed and recent price actions from 1.7043 are merely consolidations to the larger rise from 1.3503 only. That is, whole medium term rise from 1.3503 might not be finished yet and another rise could still be seen to 1.7332/8236 (50% and 61.8% retracement of 2.1161 to 1.3503) before completion.