There were few highlights in the past week with the main headlines being Gold hitting 1150 and new 2009 highs for US Stock Indices early in the week. Sometimes though, what you read between the lines is more important than the lines themselves. Case in point; in the past week, Forex traders, analysts, and media outlets began to report that trading in stocks are higher due to a falling dollar or vice versa. This is a complete opposite to the typical rhetoric of the past year; that currency prices are reacting to equity moves. So who is leading who? We may not have an answer to that question for quite some time, but by watching moves in currencies, it may relate that equity traders are running out of reasons to keep rallying the markets, and therefore using any excuse possible.

Looking ahead, the US will be celebrating Thanksgiving on Thursday. As a result trading volume from the US is expected to be thin. Also, this week's economic numbers will be cramped into three days instead of the usual five. Forex traders will be focused on Tuesday's Consumer Confidence numbers and Wednesday's Durable Goods and New Home Sales figures. At Go Forex we expect Consumer Confidence to get the most attention from Forex traders, as the release comes on the eve of Black Friday and the official start of the holiday shopping season.



All was quiet in Euro land this past week with the few economic figures that were released coming out near consensus. Currently, Forex traders are more concerned with statements from ECB members regarding the ECB's exit strategy from record low interest rate levels. During the week, ECB members Axel Weber and Jose Manuel Gonzalez-Paramo stated that if the ECB exits stimulus too quickly it could undo benefits that have been gained from its current policies. This week, German Ifo Business Climate numbers are released on Tuesday. However, at Go Forex we believe that Forex traders will continue to pay more attention to statements from ECB members and global equity prices than Eurozone economic news.



The Pound was in the spotlight last week as CPI, MPC Minutes, and Retail Sales numbers were released. The numbers were all around expectations, but after early strength the pound has traded steadily lower. At Go Forex we believe the weakness in the pound is probably related to profit taking following its impressive run-up from its mid-October lows. Looking ahead, UK Second Reading of GDP will be released on Wednesday, followed by CBI Realized Sales on Thursday. With the US on holiday mode, trading volumes could be thinner than usual for Pound crosses, but this could lead to increased volatility during the week.



As mentioned last week, the Yen was in play this week as GDP and Tertiary Industry Activity numbers along with the BoJ's Interest Rate Decision were released. GDP was slightly better than expected while the Industry Activity numbers were worse than forecast. On the whole, the lack of enthusiastic news caused the Nikkei to fall and led to strength in the Yen and investors entered the safe haven. Most importantly, the USDJPY dropped below 89.00 for the first time since early October. With the strength in the Yen, it may cause weakness in sales for the critical Japanese export market, whose prices of goods will become more expensive in foreign countries. Looking ahead, Japanese Trade Balance and Retail Sales numbers will be released this week. With last week's strength in the Yen though, at Go Forex we believe that Forex traders should be on the lookout for possible mention of intervention from BoJ members or government officials.