Asia Session Recap

The stage for today's moves were set at the end of last week. Friday brought both a potential collapse in the US automaker bailout to a viable rescue by capitalism's best friend, the TARP (Troubled Asset Relief Program). This chain of wild events sparked a spike in volatility as early fear transformed into an appetite for risk. This sign of progress, along with a lack of bad news over the weekend, led traders back into assets of (perceived) risk. Equities around the globe have ascended (Nikkei +4.7%) and commodities have pressed the topside (WTI Crude +0.92 to $47.20/barrel). The FX market has followed the same path, pressuring the Greenback and aiding the Euro.

Though trading activity has been fairly tepid to open the week, buyers climbed back onto the Euro bandwagon, pushing the currency to its highest point versus the US Dollar since mid-October. EURUSD closed Friday at 1.3370 and currently resides over 100 pips higher. The EUR crosses have lifted across the board, noted by EURJPY touching 123.00. USDJPY has been a beneficiary of this cross strength, but other have not fared as well. USDCHF dipped to 1.1700 and USDCAD dropped through 1.2400, softened a big figure. Elsewhere in the FX arena, currencies acted predictably, advancing against the USD. Among the stronger currencies were the British Pound, Australian Dollar, and New Zealand Dollars.

Glancing ahead to the London Session, the absence of any major economic data should allow market players to immediately decide the fate of the Euro. Among the pairs on our radar is EURGBP. After running up to the 0.9000 level on Friday, the pair has pulled back. Nonetheless, the huge psychological mark looms large and within striking distance for London traders.

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