The beginning of the week in Asia seemed to be upbeat in anticipation of the upcoming Obama inauguration in the US and the hope that $350 billion remaining in the TARP will be used to help stem foreclosures and possibly sure up troubled assets with a so called ''bad-bank''. The action that translated to the FX market was relatively predictable, as the Yen lost steam and the higher yielding currencies such as the Aussie and Kiwi Dollars gained ground on both the Dollar and the Yen.
AUD/USD which has moved up by two big figures since Friday in NY saw a move from lows near 0.6772 and after a high close to 0.6840, exited Asia about 30 pips lower than that high. AUD/JPY saw the same moves as AUD/USD, continuing a nice run from Friday in the US to top out near 62.20 in Asia. NZD/USD moved from Friday lows of 0.5397 to Asian highs a touch over 0.5540. NZD/JPY the same story, driving from 48.65 in NY to near 50.50 in Asian trade.

The currency markets are still fickle and subject to the whims of the daily headlines, which would lead one to believe that the elation in association with the pending Obama inauguration will help boost equities and dampen the risk aversion in FX. USD/JPY opened a good deal higher in Asia, almost 50 pips, and although it struggled to hold gained real estate, found itself slipping near the 90.79 levels toward the Europe open, still a net gain, nonetheless a smaller one. EUR/USD pushed to a weekly high of 1.3385 in thinned markets as it seems that some players chose to sit on the sidelines ahead of the US holiday on Monday (Wall St. closed), and the Presidential Inauguration on Tuesday.

Upcoming Economic Data Releases (London Session):

1/19/20098:15SZ Retail Sales (Real) (YoY) NOV 2.90%1.50%
1/19/200910:00EC Construction Output SA MoM NOV 0.10%- -
1/19/200910:00EC Construction Output WDA YoY NOV -4.00%- -
1/19/200910:15EC European Commission Releases Economic Forecasts 19-Jan
1/19/200911:50EC ECB's Trichet Speaks in Paris19-Jan