Wednesday, February 23, 2011

US Open The Week Under Pressure, Dollar Strong

*U.S. Dollar* Trading (USD) when the US session opened a sharp sell
off was seen in equities which sent the Dollar higher against risk
assets on safe haven demands. The middle east turmoil threatens to
derail the recent 3 month rally seen in global markets especially if
uprisings spread to Iran or Saudi Arabia. In US stocks, DJIA -178
points closing at 12212, S&P -27 points closing at 1315 and NASDAQ -77
points closing at 2756. Looking ahead, January Existing Home Sales
forecast at 5.24mln vs. 5.28mn previously.

The *Euro* (EUR) fell sharply in Asia on the general risk aversion and
Euro Debt concerns but in excellent health sharply in in the European
session on more comments from ECB officials regarding interest rate
hikes to counter inflation. Overall the EUR/USD traded with a low of
1.3523 and a high of 1.3715 before closing the day around 1.3675 in
the New York session. Looking ahead, December Industrial Orders -0.8%
vs. 2.1%.

The *Japanese Yen* (JPY) had a volatile trading day with risk aversion
sending the Yen higher across the board. The USD/JPY was able to spike
higher in Asia to Y83.40 after Temperamental's place Japan on negative
watch. Overall the USD/JPY traded with a low of 82.99 and a high of
83.55 before closing the day around 83.15 in the New York session.
Update January Trade Weigh at -471bn vs. 60bn forecast.

The *Sterling* (GBP) was under gray promotion difficulty against all
the majors with risk turned off. Cable went back to 1.6100 and EUR/GBP
went back towards 0.8500. GBP/JPY was also under difficulty as the
recent rally reversed. Overall the GBP/USD traded with a low of 1.6099
and a high of 1.6231 before closing the day at 1.6130 in the New York

The *Australian Dollar* (AUD) broke through parity as the market sold
the risk currency heavily across the board. Adding to the promotion
difficulty was news of a major Earth Quake in the New Zealand which
hurt the NZD and overflowed into the Aussie as well. Overall the
AUD/USD traded with a low of 0.9965 and a high of 1.0087 before
closing the day at 0.9990 in the New York session.

*Oil & Gold* (XAU) profit taking kept the precious metal close to
$1400. Overall trading with a low of USD$1392 and high of USD $1411
before ending the New York session at USD$1398 an ounce. Oil finished
lower but was extremely volatile. WTI Oil Closed -$2.10 at $95.50 a

Source: ActionForex.Com

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