Meanwhile, BOJ Yamaguchi was on the wires warning that the local economy would be in a severe condition until Summer or mid-2010. Elsewhere, Treasury Secretary Geithner was out propping the buck over the weekend after saying that the US would never lose its triple-A status. Geopolitics remains on investor minds after Iranian President Ahmadinejad ordered the start of a higher uranium enrichment for use at a medical research reactor. The commodity currencies had been initially bid early on following the completion of an Australian coal supply deal to China, but once again came under pressure on the back of broader global macro sentiment and flows, despite firmer gold and oil prices.
Looking ahead, the European calendar is rather light, with Swiss unemployment (4.3% expected) kicking things off at 6:45GMT, followed by Swiss retail sales at 8:15GMT and Eurozone Sentix (-2.7 expected) at 9:30GMT. US equity futures point to a slightly firmer open, while commodities trade in a different direction and are very well bid. It will be interesting to see how things play out for the remainder of the day, with the economic calendar in Europe and North America not really factoring in to price action. The USD is now highly overbought against most major currencies and we would not at all be surprised to see the development of some form of a correction over the coming days.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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