Daily Forex Overview

Previous session overview

On Friday, risk-sensitive currency pairs advanced, despite a bruising U.S. employment report, on a rise in U.S. stocks.

The US dollar fell vs. other major currencies also due to data showing steep US job losses in the last three months, adding to fears about the outlook of the economy.

The single currency rose from 1.2653 to 1.2851 against the dollar and closed at 1.2720. The strength was maintained as US data was very weak and Stocks held gains.

As equities reverse though the pound found some buyers and the GBPJPY lead the recovery. The British pound also strengthened against USD from 1.5535 to 1.5880 before closing at 1.5641.

A positive close in US stocks took dollar-yen up to a JPY98.68 high in Friday's NY session, with the rate closing the week relatively buoyed around JPY98.24. Weekend news of the Chinese stimulus package, worth around 15-20% of GDP, provided stock markets with a further boost, with dollar-yen rallying again into early Asia. The pair put on 100-points to a JPY99.40 high into the Tokyo fix before drifting back below JPY99.00, making lows in the Tokyo afternoon around JPY98.70.

The Canadian dollar weakened against the dollar with lower crude oil prices. Crude oil prices dipped below USD60 a barrel briefly, hurting the loonie.

Plans by the Chinese government to jump start the country's ailing economy fueled a bounce in commodity prices and regional equities Monday, helping the Australian dollar higher. Traders said China's US$586 billion shock therapy plan for domestic growth will boost demand for resources and Australian exports, which in turn will support the local currency.

Market expectation

The euro is holding in narrow technical ranges Monday.

EURUSD is holding a good portion of the day's gains into early European dealing and now trading around USD1.2835. Light bids now seen at USD1.2820/15 and USD1.2800 with stops below. On the topside, light offers are placed into USD1.2900, more at USD1.2950, with Technical analytics noting key resistance at the 21-day moving average (USD1.3001), EURUSD having traded below this indicator since late-September.

EURCHF neutral to positive and will maintain upside pressure, traders say. After a break above 1.5090, the cross has scope to rise towards 1.5290/1.5335 and then 1.5520.

Most important events of the day