Friday, January 28, 2011

Asia Session: The Week Ends Quietly

The end of the trade week in Asia was tediously quiet with the EUR/USD
giving up some ground to profit takers ahead of the weekend. The
EUR/USD slid from 1.3740 to return to 1.3700 levels that the pair
frequented in yesterday's session. Adding to the profit taking was a
bit of weakness due to the reluctance of EU members Finland, the
Netherlands, Austria and Slovakia to endorse an expansion of EFSF
funds. The EU has been trying to expand the breadth of the rescue fund
in order to help appease investor fears of member bailouts potentially
crippling the European Union.

Other risk currencies tilted towards the greenback as well today, with
the GBP/USD dropping from 1.5925 to 1.5880 and the AUD/USD seeing
0.9885 after earlier highs near 0.9910.The USD/JPY pair drifted lower
today after yesterday's downgrade of Japan by the S&P sent the pair
from 82.15 to 83.20 in a dynamic burst. USD/JPY drifted from 82.90 to
82.60 as the pair did not react to poor household spending, (-3.3%
versus -0.6%) and retail sales, ( -2.0% versus +0.6%) coupled with a
better than expected unemployment rate of 4.9% versus 5.1% expected.
In the crosses, the yen saw some bargain hunting as buyers took
advantage of the low yen after the downgrade. Also of note is that
gold, XAU/USD touched an almost 4 month low near $1308.00 as the
precious metal continues its new year decline.

With no real data due up in London, the grand finale of the week will
be US advance GDP with a forecast of +3.5% due at 13:30GMT. Have a
great weekend…

Source: ActionForex.Com

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