by Stephanie Jones

Investors rekindled their confidence in our stock market as we rallied through the remainder of this quarter’s expirations (also known as quadruple witching). Additionally, today recorded the largest-ever first hour volume in trading.

The Dollar climbed to six-week peaks against the Yen on Friday. The Dollar’s run was aided by the lowest levels seen in the Yen since early November. Japan’s decision to leave rates unchanged helped propel this situation. The U.S. Dollar has returned higher levels traded at the end of October. The confirmation of today’s positive economic news of Personal Income and Personal Spending reassured traders of the near term recovery of the U.S. economy.

The Euro is trading in the opposite pattern of the Dollar, at low levels similar to those toward the end of October. The interest rate trade was lower reacting to suspected rising inflation in the U.S. and the potential to limit Federal Reserve interest-rate cuts, while the European Central Bank may refrain from raising its rate due to credit market stress. Despite these losses, the Euro managed to trade at a one-week high against the Yen.

Not only did the UK Sterling trade slightly down against the Dollar, but the currency is also trading at all time lows against the Euro. The UK Sterling has been taking a beating recently, plummeting to its lowest levels since August. In fact, the UK’s currency has been consistently dropping since the second week of December. Contributing to this downward trend is traders’ suspicion that the UK is going to cut interest rates as early as this coming January.

The Australian and Canadian dollars made some recoveries from recent declines. The Australian dollar made a 5-day high, and the Canadian dollar saw its highest levels since the end of November. Similar to other recovering currencies, the Aussie dollar has made a fresh improvement due to a more comfortable risk environment. Technically speaking, the Aussie and the Canadian dollars look great. The rise in the gold and crude markets has helped sustain the recent moves and it appears there may be another attempt made at higher levels.

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