USD/JPY - Dollar Hits Highest Level vs Yen Since December
The Dollar-Yen pair climbed 200 pips from its intra-day low near 92.75 to reach 94.95, the highest level it's been since December 1st. News that US financial regulators were contemplating injecting more funds into domestic banks reduced demand for safe haven currencies, and brought about some tentative risk appetite. Also, the Yen was being pressured as credit-default swaps gauging Japanese government bond risk surged. NY equities traded higher to start the session as there was talk of the government expanding its stake in Citibank. However that early bounce was wiped out and stocks fell lower in afternoon trading with the minerals sector and the tech falling on concerns over the economy.
GBP/JPY - Pound Swings 500 Pips vs Yen as Financial Sector Gets a Boost
The Pound-Yen pair had a 500 pip swing overnight, reaching its highest level since January 9th. The Pound was bid up as financial stocks gained amid speculation banks are stepping up efforts to shore up their finances, with Royal Bank of Scotland said to plan to cut its costs by more than 1 billion pounds. The UK government is also expected to announce an asset-protection scheme that would insure banks against losses on assets in the future, which helped the financial sector. The drop in US equities stalled the Pound rally which then gave up about 200 pips from its high near 139.10.
GBP/USD- Pound Gains on Greenback as Well, Beofre Receding in NY
The Pound-Dollar pair rose to 1.4660 today, a 250 pip climb from where it started the global session. In NY trading though it gave up about 160 of those pips to fall to 1.45.
EUR/USD - Euro Gives up Early Gains on Trichet's Comments
The Euro was also up on the Dollar overnight, but unlike the Pound, it gave up all of its gains and was trading lower in the NY session. From an intra-day high near 1.2990 the pair was off 270 pips to 1.2715. The Euro erased its gains against the greenback following a speech by ECB President Trichet in which he said credit flow in the euro region are starting to decline.
CAN Retail Sales Worst in 15 Years
In Canada, retail sales data for December disappointed forecasts. Sales were down 5.4% on the month, which is the largest monthly decline in over 15 years. Sales were led lower by the automotive sector. Retail sales excluding autos showed a 3.2% reduction.
USD/CAD - Loonie Gives Back Gains Following Weak Sales Data
The US Dollar-Canadian Dollar pair fell lower overnight, reaching the 1.2350 level. That was close to a 200 pip move from the pair's intra-day high to start the global session. However, from that low, the greenback recovered its losses, and pushed the pair back to the 1.25 level. The weak retail sales data from Canada pressured the Loonie.
Tonight, Japan releases its corporate service price index. Overnight, Germany posts its IFO business climate index, the Euro-zone releases data on new orders, the UK posts info on mortgage approvals, retail sales, and business investment.
Tomorrow, the US posts two measures of housing prices, the S&P Case-Shiller 10 city-index and the government's national monthly index. Also on tap will be consumer confidence data along with the Richmond fed index. Fed Chairman Bernanke is also scheduled to testify before the Senate tomorrow, and his statements may impact currency markets.
Capital Market Services, L.L.C.
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