USA
• On Monday, the dollar ended substantially higher against the British pound
and the euro as concerns about the U.K. banking system and a ratings
downgrade for Spain pressured those currencies and reinforced a recent
return of risk aversion.
• Investors are pinning hopes that the regime of incoming U.S. President
Barack Obama can lasso the sinking economy and help it recover.
Figures out today:
2200 US Jan 17 ABC/Washington Post Consumer Confidence Index Prev -49
N/A US U.S. Inauguration Day; No major economic indicator scheduled
UK
Figures out today:
0930 UK Dec UK inflation figures published
CPI Monthly Exp -1% vs Prev -0.1%
CPI Yearly Exp +2.5% vs Prev +2%
CPI Core Yearly Exp +1.4% vs Prev +2%
Retail Price Index Monthly Exp -1.3% vs Prev -0.8%
Retail Price Index Yearly Exp v+0.9% vs Prev +3%
• Yen Gains to Record Versus Pound on Concern Bank Losses to Rise: Jan. 20 (Bloomberg) -- The yen rose to a record
against the pound and gained versus the euro on speculation credit-market losses will widen after the U.K. increased
aid to banks, curbing demand for higher-yielding assets funded in Japan’s currency. The British pound fell to a sixyear
low versus the dollar after the U.K. government said it would spend an extra 100 billion pounds ($142 billion) to
support the nation’s banks, a second lifeline in three months, and increase its stake in Royal Bank of Scotland Group
Plc.
Europe
Figures out today:
1000 GER Jan ZEW Indicator of Econ Sentiment
• The euro continues Tuesday under pressure from the dollar and yen, as traders respond to the slumping economic
prospects in Europe.
General
• Zero Rates Push Currency Traders to Cash-Rich Franc, Yen, Krone: Jan. 20 (Bloomberg) -- At a time when interestrates
are sinking toward zero around the world, the biggest currency traders are recommending countries that have the
largest trade surpluses, led by Japan, Norway and Switzerland. BNP Paribas SA, the best currency forecaster in a
2007 Bloomberg survey, says the yen will strengthen about 14 percent against the dollar by June. Goldman Sachs
Group Inc. made Norway’s krone one of its top 2009 picks, with possible gains of 17 percent versus the dollar. Bank
of America Corp., the largest U.S. lender by assets, says the Swiss franc will advance against every major currency.
Australia and New Zealand
• N.Z. Dollar Falls After Inflation Data; Australia Dollar Drops: Jan. 20 (Bloomberg) -- The New Zealand dollar
approached a six-week low after a government report showed consumer prices fell last quarter, giving the central bank
more room to cut interest rates to a record low next week. Australia’s currency also weakened, ending two days of
gains, after the European Commission lowered its forecast for the euro-area economy, adding to concern the global
slowdown will worsen. Higher interest rates in Australia and New Zealand have made the two nations’ currencies
favourites with investors seeking extra yield, helping them reach the strongest in more than 20 years against the dollar
in 2008.
Commodities
• World oil prices are mixed Tuesday in a market plagued by weak global demand, analysts said. Nymex for February
lost $2.12 to $34.39 a barrel, while Brent rose 30 cents to $44.80.
• Spot gold is still down $5.80 at $830, although it has pared some of its earlier losses on the weak euro.
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