Daily Forex Analysis by Finexo.com 30/12/2009

USD

Risk appetite returned on Tuesday in another lightly traded session that saw the Dollar fall to higher yielding currencies such as the Canadian and Australian Dollars. The last minute showing comes as there is some speculation that the US economy is coming out of recession based on bits and pieces of positive data, the most recent coming Tuesday in the form of a Consumer Confidence poll which came in better than expected. Two bits of this data were cause for some concern, as consumers stated that their present situations were the worst since February 1983; and the “jobs” index also fell also to its lowest level since February 1983 signalling that there are still many people looking for work that is simply not there right now.

At 10:20PM GMT, the US Dollar was trading up .17% to the Euro to 1.4351, up .35% against the Japanese Yen to 91.94, up .6% versus the British Pound Sterling to 1.59, down .11% to the Canadian Dollar to 1.0431, down .82% to the Australian Dollar to .8943, down 1.5% against the Kiwi to .7185 and up .12% to the Swiss Franc to 1.0366.

With not much more going on this week, the focus is really on the Auction of over $118 Billion Dollars worth of Treasury Notes this week. The second of three auctions was Tuesday in which the US sold 42 Billion Dollars worth of five year notes. The US has had to increase the offer on yields as it increases its debt offerings because many buyers are demanding more in the face of a growing US national debt. As yields continue to rise many fear mortgage rate increases beyond what can be handled given the economic climate, and with many commercial properties coming up for renewal in 2010, there is speculation that the “second-wave” of a real-estate slump is about to begin.