Sorry for the lack of update the last couple of nights.
Today the dollar made further gains during our ‘risk off’ european session; Equities did make a strong recovery during NY (S&P finishing on close to 18 month highs), but the dollar held most of its gains, this could be a pretty telling signal and I think we may well see further dollar gains near term. I refered to this potential last Sunday as we seem to be seeing a pull back in dollar funded carry trades. Sentiment does appear to continue to be dollar bullish.
Germany posted some horrible ZEW economic sentiment numbers, which aided the EURUSD sell-off. The U.K posted some strong inflationary numbers this morning falling in line with the pattern of stronger British data that we have seen recently and should continue to see (they do have a hell of a lot of room for improvement!). This all pushed EURGBP down to multi-week lows.
Yen crosses still bouncing around relatively range bound. There is a nice strong correlation again with equities which does make them easier to trade (this wasnt the case during long periods late last year). I hold my GBPYEN long @ 147,10 and think we could well see some further upside during tonights Asian session.
On the data front tomorrow, we are choc-a-bloc, with inflation numbers out of the eurozone, which may well surprise to the downside, and later on, more inflation and housing data out of the U.S. From the U.K we have rate decision minutes and job data. We will also see a barrage of corporate earnings. All in all, quite busy and we should see a volatile day.
C.
