OPENING COMMENT
The US Dollar has come back under some pressure in the early week, with the failure of Eur/Usd to close below the 50-Day SMA on Friday helping to fuel some renewed broad based currency buying. Fundamentally, it has been the rally to fresh record highs by $1160 in gold prices and some comments from Fed Bullard that have weighed on the buck. Fed Bullard has recently said that he would like to see the Fed extend the life of its MBS buying program beyond March’s end point.
Elsewhere, M&A related activity revolving around bids for Cadbury have been moving markets in the UK on news that Ferrero and Hershey do not have sufficient funds for acquisition. On the data front, it has been all second tier releases with Australian new motor vehicle sales rising for the third month in a row, while New Zealand consumer confidence has pulled back from its previous 22-month high. Finally, Fed Evans has said that he expects unemployment to peak at about 10.5%, and not come off until the summer 2010.
Looking ahead, Swiss money supply is due at 8:00GMT, followed by German PMI (51.6 expected) at 8:30GMT and Eurozone PMI (51.2 expected) at 9:00GMT. US equity futures point to a higher open, while commodities are well bid, led by yet another surge in gold.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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