Market review for 6th January 2009

1. Market review for 6^th January 2009

US Dollar: Monday saw strengthening of the US dollar. Construction spending data (MoM) for November, which was published on Monday, turned to be better than expected: -0.6% against the forecasted -1.40%.

The dollar was also supported by the US President’s Barak Obama new plan. It is expected that the newly elected US President will develop a tax reduction plan for the amount of $300 billion. In addition to that, a new economic inducements program is being worked out, which could amount to $775 billion.

Euro: Due to the dollar strengthening, the EUR/USD pair established a session minimum at the level of $1.3630.

The euro was under pressure after the announcement of the ECB representative, Lukas Papademos, who mentioned that Europe might need further principal rates reduction.

British Pound: The GBP/USD pair set session maximums at the level of $1.4578, but then decreased.

Japanese Yen: The yen incurred losses against the major currencies due to the speculations regarding the renewal of the investors’ demand for the high-risk assets. Since the stock markets situation stabilized, the Japanese yen dropped and reached the 93.50 mark.

Happy trading!