USD Mixed, EU Pledge to Solve the Greek Fiscal Crisis

FX Highlights

• The USD is trading mixed rebounding from early overseas decline, USD initially weakened in reaction to EU pledge to solve the Greek fiscal crisis and narrowing of Greece's credit default swap spreads, USD rebounded as the details of the EU plan to address Greek fiscal issues were limited and EU Sentix index came in much weaker than expected, GBP was pressured by fresh concern about UK sovereign debt rating as weekend polls suggest increased risk of a hung parliament, CHF trades higher supported by report of strong Swiss retail sales, JPY trades mixed tracking weaker equity market trade, commodity currencies firm as crude prices and gold trade higher, Australia signs a large coal deal with China
• Focus turns to today's release of Canada's housing starts
• U.S. Treasury Secretary Geithner predicts slow recovery but does not see a double dip recession, he went on to say that the US will never lose its AAA rating and that the US deficit will shrink
• Former Fed Chairman Greenspan expects a slow recovery in the US and said he would be concerned if stocks continue to fall
• Japan's December current account surplus widens to ¥900.8bln, January M2 money supply rose by 2.9%, BOJ's Yamaguchi says economy may hit a soft patch through summer, JPY mixed
• Reuters reports that Australia has secured a huge coal deal with China, AUD higher
• EU February Sentix index at -8.2 versus -3.7 last month, EUR mixed
• Swiss December retail sales rose by 4.7% and January unemployment rate rose to 4.5% from 4.4% last month, CHF higher
• Pimco's CEO El-Erian's says the UK is the most at risk for losing its AAA sovereign debt rating, UK polls warn of possible hung parliament, GBP lower
• ECRI's inflation gauge rose for the tenth straight month to 102.0 from 99.0 in December, this suggests that inflation will likely be higher in the coming months
• December consumer credit fell by $1.73bln much less than the expected $8bln decline, this suggests consumers are paying down debt which eventually will positive for the US economy
• CFTC commitment of traders showed that EUR shorts are at a record level on the IMM
• US equity markets set to open lower, European equities 0.2% lower, Nikkei closed 105 points lower

Upcoming Events

• US - Monday, no major US economic data is due for release today
• CAN - Monday, January housing starts will be released expected at 164k compared to 174k last month

Easy Forex

Michael J. Malpede is Chief Market Analyst with Easy-Forex® and has previously been featured on Bloomberg TV, Bloomberg radio, Reuters, MarketWatch, Wall Street Journal, Chicago Tribune, Chicago Sun Times, Toronto Star and Nikkei press. In analyzing the markets, he draws from 29 years of Foreign Exchange Research as a Foreign Exchange Analyst.

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