Aussie, Kiwi and Canadian Dollars drop on oil slide and data

Today's Highlights

Aussie, Kiwi and Canadian Dollars drop on oil slide and data

Sterling advances by default

Carney slates ECB

FX Market Overview

In one of his first visits, the new Greek Prime Minister, Alexis Tsipras visited a war memorial in Kaisariani where 200 Greek political activists and resistance fighters were slaughtered by the Nazis in 1944. The memorial is a symbol of liberty from German oppression. Can anyone think why he made that such an urgent agenda item? By sheer coincidence, he and his Finance Minister are starting to rattle their sabres towards the EU, EC and IMF and Germany in particular. Some of their comments panicked foreign investors who withdrew from Greek share markets. That allowed Greek stock market indices to slump and sent a shudder through other European markets. Whilst there is a lot of European data today, none is expected to stop the decline in the euro just yet. Nevertheless, these next few months will provide a bumpy ride for the euro so hold on tight and scream if you want to go faster.

In the UK, Bank of England Governor, Mark Carney has commented on two things. One is that UKI interest rate hikes will be very gradual and the other was an undisguised attack on the austerity and anti-growth policies of the Eurozone authorities. I am sure the Greeks will love hearing that but he will not have made to many friends in the ECB. Sterling didn't notice this really. The Pound is still in positive territory against most other currencies and has even rebounded by a cent and a half against the US Dollar. AS long as the Pound can stay above $1.49, there is scope for a proper recovery within the range it is operated in for 4 years.

The US Dollar eased a little after the Federal Reserve reiterated its desire to be patient on interest rates whilst the announced no change to current policy. No US rate rise can be expected until at least June 2015 but many analysts feel that slowing global growth may delay that decision even further. The Fed certainly doesn't have an inflation problem to contend with so rate hikes shouldn't be on the agenda in any case.

The Sterling - Australian Dollar rate hit its highest level since September 2009 this morning in spite of marginal improvements in import and export prices. Fears over lower commodity prices and the ongoing slowdown in China are fuelling concern for Australia's exports. Seeing China add further liquidity to the domestic markets is a sure sign they are also concerned.

The New Zealand Dollar slumped last night after NZ reported a trade deficit when the markets had forecast a surplus. The Sterling - NZ Dollar rate his levels not seen since September 2014 and many orders were triggered overnight. There is scope for this to reach the NZ$2.07 high we saw in September but beware of expecting that because this may just be a knee-jerk reaction which could unwind as quickly as it developed.

The slide in oil and commodity prices has also hit the Canadian Dollar which slipped below 80 cents against the US Dollar and allowed the Pound to push the loonie to C$1.90 for the first time since mid-2009. The high in 2009 was C$1.9317 and that could well be the new target.

The overnight Asian market will bring a barrage of Japanese data tonight so if you need to trade in Yen, it may be worth placing automated orders to manage the risk of further Yen volatility.

And today's 'Bah humbug' award goes to the post office in Ireland. A young girl wrote a letter to Santa, put it in an envelope addressed to Santa Claus, Santa's Grotto, Lapland, The North Pole and posted it. Sadly the letter never got to Santa because a worker at An Post Ireland sent it back to the sender marked with 'Insufficient Address'. More oops ooops ooops than Ho Ho Ho really.