Risk aversion was the flavor in the NY session and the buck was overall a beneficiary of this. US stock marts plunged more than -2% in broad terms as a speech from Atlanta Fed President Lockhart was sobering. Indeed, he indicated that 1Q 2009 economic growth could be just as bad as the dismal 4Q 2008 number – in the range of a -4% to -6% decline. News from the eurozone was likewise bleak as S&P announced that it is considering whether to cut Spain's long-term AAA credit rating. The news that this 12% chunk of the eurozone economy could be downgraded hurt EUR in early NY trading.
EUR/USD shed about -70 pips and was sitting near 1.3360 ahead of the close. The pair found support just below the critical 1.33 mark and failed to test 1.3250 (an area where a good amount of stops ostensibly lurked). The decline in EUR/JPY optimized the move away from risk as the pair sank more than -150 pips towards the 119.10/20 area. USD/JPY was about -75 points weaker near the 89 mark.
One of the bigger moves came in USD/CAD as oil plunged about -8% to below $38/bbl as supply/demand fundamentals matter more than geopolitics at the moment. Loonie jumped nearly 200 points in the session and was sitting near 1.2170 near the close. The 1.20 break topside proved huge and this is likely to be critical short-term support now for the pair.
Upcoming Economic Data Releases (Asia Session) previous forecast
* 1/12 23:50 GMT JN Current Account Total NOV ¥960.5B ¥600.0B
* 1/12 23:50 GMT JN Adjusted Current Account Total NOV ¥1113.2B ¥625.4B
* 1/12 23:50 GMT JN Trade Balance - BOP Basis NOV ¥145.8B -¥76.2B
* 1/12 23:50 GMT JN Bank Lending Banks Adjust YoY DEC 4.10% - -
* 1/12 23:50 GMT JN Bank Lending incl Trusts(YoY) DEC 3.20% - -
* 1/12 23:50 GMT JN Bank Lending Banks ex-Trust Y% DEC 3.60% - -
* 1/13 0:01 GMT UK BRC December Retail Sales Monitor 19-Jan
* 1/13 0:01 GMT UK RICS House Price Balance DEC -76% -74%
* 1/13 4:30 GMT JN Bankruptcies (YoY) DEC 5.20% - -
* 1/13 JN Eco Watchers Survey: Current DEC 21 20.4
* 1/13 JN Eco Watchers Survey: Outlook DEC 24.7 - -