Daily Forex Analysis by Finexo.com 18/01/2010

On Friday, US data releases were mixed though were generally disappointing at the margin. December CPI was slightly below forecast, rising just 0.1% m/m with core also up 0.1% m/m though year-on-year comparisons ticked sharply higher as a result of higher oil prices. Industrial production increased in line with expectations in Dec, +0.6% m/m, though much of the gain could be attributed to higher utilities output due to the extremely cold weather during the month.

Friday’s Lows & High
EUR/USD – 175 pips (1.4336-1.4511); AUD/USD – 99 pips (0.9215-0.9314);
USD/CAD – 20 pips (1.0270-1.0290); GBP/USD – 34 pips (1.6288-1.6322).

The Asian session started off slowly this morning with the Monday morning liquidity not proving to be too volatile. The Nikkei suffered during the morning session, (down 1.3% at the break and down 1.16% at the close) on the heels of a weak Wall St. and following news that the Tokyo Prosecutors Office had arrested an incumbent DPJ lawmaker and 2 aides of sec-gen Ozawa.

Friday’s Lows & High
USD/JPY – 72 pips (90.59-91.31); EUR/JPY – 210 pips (130.30-132.40)
CAD/JPY – 109 pips (88.08-89.17); GBP/JPY – 43 pips (148.15-148.58)

Sentiment in Australia was also dampened mildly after Treasurer Swan reiterated at the weekend that the government would carefully withdraw its stimulus measures as private demand recovers. Swan noted that the stimulus measures were designed to have its maximum impact in the June quarter of last year and then gradually phased down. Certainly, Australian data has been suggested that the measures had worked but it remains to be seen whether the consumer is willing to “go it alone” once the measures are withdrawn. Watch consumer sentiment data on Wednesday as the first indicator of future potential.

Friday’s Lows & High
AUD/USD – 99 pips (0.9215-0.9314); EUR/AUD – 73 pips (1.5522-1.5595)
GBP/USD – 124 pips (1.7531-1.7655); AUD/JPY – 136 pips (83.62-84.98

Written by Finexo.com