Asia Session

The US Dollar took a few steps out of the hole it was in on Wednesday after China once again doubted the fitness of the Greenback as the sole global reserve currency. And so the verbal tug of war out of China continued, with news that China would want to debate the potential for an alternative global reserve currency at next weeks G8 meeting, and then today the Chinese vice foreign minister denying the claims and exclaiming that the dollar was in fact the premier currency of the global economy as long as it remained ''stable''. The constant vacillating out of China pertaining to the Dollar is beginning to pan out like a bad 1970's sitcom.....

Regardless, the Dollar was slightly stronger in Asia, with EUR/USD dipping from the 1.4150 region to lows right at the 1.4100 figure. The British Pound slipped as well this session, hitting a low near 1.6450 after earlier flirtations with the 1.65000 levels. The low in GBP/USD coincides with the 200 hour Simple Moving Average which currently presides at that same level. The Aussie Dollar took a hit against the Dollar and the Yen after trade data came out much worse than estimates, leading many to surmise that the current low interest rates in Australia are here to stay for a while. AUD/USD dropped from just under 0.8100 and still looked soft as it slid through 0.8040. AUD/JPY skid about 65 pips as well, as it bottomed out at 77.60 as of this writing.

Tomorrow brings important market moving data from both sides of the Atlantic, with the ECB starting things off with its rate decision where most expect the rate to remain unchanged at 1.0%. However, it is the following statement that could help move the Euro as traders look for clues out of ECB President Trichet's commentary. The more important data, with a higher probability of sending FX markets into frenzy is the Employment data out of the US. The Unemployment rate is projected to come in at 9.6%, up from 9.4% in May, and the economy is projected to have lost 365,000 jobs in June, up from the 345,000 that were lost in the month of May. As can be surmised, any deviation from these projections will have immediate repercussions in the US Dollar.

Upcoming Economic Data Releases (London Session) prior expected