Asia Session

Today the center stage in Asia belongs to the EUR/USD and its dramatic descent to lows not seen in almost two months as stop losses greased the tracks on a ride from just over 1.2800 to depths just under 1.2640...The triggering of these stop losses in a thinned environment were still based on fears that the unstable nature of Eastern Europe could continue to undermine the single European currency. Many Western European banks had been gobbling up the old Eastern Bloc's banks due to the regions huge credit growth. This is now a potential straw that breaks the camels back so to speak, and the market is spooked by the possibility of Eastern banks bringing down the West. Not helping the situation in Europe is the view that further, deeper rate cuts are vital to keep within the global bell curve. EUR/JPY dropped like a stone as well on the Euro weakness, falling from 117.45 to lows of just near 116.40 before a nice rebound on Yen selling. The pair is near 117.00as of this writing.

The US Dollar was the big benefiter of the Euro woes, as it gained some nice real estate across the board....GBP/USD hit a 1.4184 low, and AUD/USD was pummeled from the 0.6530's to near 0.6410, while USD/CHF move up a handle and a half to 1.1745 highs, and USD/CAD moved just under a handle to top the charts at a pip or two over 1.2500.

If the Euro was the center stage today, than the side show was no doubt Japan, and the resignation of Finance Minister Nakagawa amidst allegations that he was intoxicated at the G7 meeting over the weekend. (A video of the event is available for your viewing pleasure on the internet...) With the resignation announcement, Japan's economy in turmoil, and Prime Minister Aso under fire, USD/JPY flew from early 91.63 lows to highs over the 92.75 levels.

There is a lot on the plate for the FX markets, including German and Euro Zone ZEW Surveys, UK CPI, and Euro Zone Trade balance later in London. Past that, in the US on Tuesday, the markets are looking to the open of Wall Street after a three day weekend and the turnaround plans set to be presented by US automakers to congress.

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