Asian Nervousness Rises

The EUR came off the higher parts of its range on Monday against the USD. It remains to be seen if this is merely profit taking via speculative positions or a sliver of doubt coming into the Single Currency. The JPY has continued to get stronger since Friday, nervous trading remains significant in Asia and this was heightened this morning as the Japanese government raised the level of its crisis regarding the radiation problem. In other important news a Goldman Sachs report, which was distributed late yesterday warned its investors that prices within many of the commodity markets are over valued due to speculation and warned its clients to take profits now. On this news Gold and Crude Oil became softer and it will be of interest to see what knock on effects this has with physical resources today. Gold as of this writing is trading around 1455.00 USD an ounce.

Economic data was limited on Monday, but that begins to change today. The U.K. will publish CPI numbers, the German ZEW Economic Sentiment reading, and U.S. Trade Balance figures are part of the parade that will ensue. However, the crux of trading sentiment may come from lingering fears regarding the officially heightened level of the Japanese nuclear crisis. While this tragedy has been in the news for one month, today’s developments could spark additional cautious trading within equity markets. Asian bourses have shown some of this effect already this morning. Wall Street’s returns were mixed among the major indexes yesterday.

The EUR remains a focal point for many traders as they question its value taking into consideration the glut of rather troubling news shadowing its financial strata. Taking that into context the USD has many investors who are not keen about the manner in which the Federal Reserve or the U.S. government has acted either. The policies of both the ECB and Federal Reserve have come under fire from critics and it remains to be seen what the results of their actions will produce long term.

The GBP followed the EUR as it traded weaker against the USD on Monday. Today’s inflation data from the U.K. will of interest for investors who are monitoring the Bank of England closely as they battle weak growth, tough austerity measures, and problematic cost increases due to rising energy prices. The Sterling has performed well the past few months and it will prove interesting to see if the GBP comes under pressure.

The AUD has come off of its highs and it has done this in step with Gold which became softer on Monday. The AUD has been one of the strongest currencies globally and it needs to be watched. Taking into consideration possible short term commodity price weakness the AUD could prove a worthwhile opportunity for range traders who take advantage of its movement. The AUD still offers a higher interest rate than most currencies and may continue to find some backing.

The news from Japan may lead the market today. Investors globally have many questions about a complex mix of concerns. The European financial situation, the sustainability of American growth, and the Middle East crisis all continue to be debated. As a barometer commodity prices and equity bourses should be watched closely.

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