FX Highlights

  • The USD is trading lower as equity markets rise and optimism about the global recovery rises as well, officials in Japan and Germany suggest that the Japanese and German economies have bottomed, USD was also pressured by report that a researcher with China's central bank suggests China increase its holdings of JPY and EUR, GBP pressured by speculation that the BOE may expand asset purchases after Friday's release of worse than expected UK Q3 GDP with downside limited by report of rising business confidence, commodity currencies tracking stronger equity market trade, CAD gains limited by IMF warning that strong CAD could slow Canada's recovery
  • Focus turns to today's release of Chicago Fed National Activity Index expected at -0.3 compared to -0.9 last month
  • A researcher at China's central bank calls on China to move some of its USD reserve holdings to JPY and EUR
  • Japan's PM says Japanese economy seems to have bottomed, JPY higher
  • Australia's Q3 final goods PPI rises 0.1%, AUD higher
  • German November GFK at 4 compared to 4.2 in October, Noyer says world economy recovering faster than expected, currency stability key to recovery, EUR higher
  • Sunday Times reports that economists are warning the BOE not to panic over Friday's GDP data, UK business confidence rose to its highest level in 18 months according to KPMG, BOE Blanchflower suggests the BOE may expand its asset purchase program by another £50 bln, GBP higher
  • IMF says CAD strength could slow the recovery, but the economy is showing resilience, IMF expects Canada's economy to contract by 2.5% in 2009 and grow by 2% in 2010, Canada's August budget deficit rose to 5.3 bln, Canada's Finance Minister Flaherty says Canada will reduce its deficit in the near term but won't rely on tax hikes, CAD lower
  • China's PM Wen says that removing fiscal and monetary policy stimulus could cause a setback in China's economy
  • ECB's Constanacio says the exchange rate is not an objective of policy, strong EUR helps control inflation
  • CFTC commitment of traders for last week on the IMM shows speculators increased short USD position, the increase reflected a sharp drop in short GBP positions
  • Marketwatch reports that 13% of US banks could fall in this cycle
  • US Capmark Financial files for bankruptcy
  • US equity markets set to open higher, European equities 0.5% higher, Nikkei closed 80 points higher

Upcoming Events

  • US - Monday, no major reports are due for release today
  • CAN - Monday, no major reports are due for release today