[B]OPENING COMMENT[/B]
The market is showing some signs of reversing in the early week with all of the[B] major currencies [/B]pulling back against the [B]buck[/B], with the exception of the [B]Yen[/B]. The Yen was aggressively bid on Friday with the market collapsing into the lower 90.00’s ahead of the latest minor bounce. Price action in the Yen has been quite interesting with the single currency breaking away from any familiar correlations with US equities. Instead, it has been the USD that has emerged of late as the[B] attractive funding currency [/B]on compelling yield differentials. On the day, the Yen is the strongest currency, while [B]Kiwi lags[/B], with the antipodean reversing off of its recent 2009 highs just shy of 0.7100 from Friday. The weakness in Kiwi today does not come as a shock, after the [B]much weaker retail sales [/B]data and earlier comments from RBNZ Governor Bollard who had expressed concern over the appreciation in the New Zealand Dollar. With the Yen strength and pullback in currencies today, the [B]Yen crosses[/B] should also be watched closely, as they have been coming under pressure as well. [B]Asian equities [/B]are tracking lower on the day, in response to Friday’s bearish close in US stocks, while [B]commodities[/B] are also offered. Looking ahead, [B]Swiss producer and import prices[/B] (0.1% expected) are due at 7:15GMT, with [B]Eurozone employment[/B] and i[B]ndustrial production[/B] (-0.2% expected) at 9:00GMT.
[B]Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail [/B][B][email protected][/B] [B]and you will be added to the [/B][B]“distribution” [/B][B]list.[/B][B][/B]
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