Forex Daily Briefing - Global Currency and Financial Market Commentary

Jan. 30, 2009 - PRLog -- It appears that the US Dollar and the Japanese Yen are continuing their gains today.  The Euro’s gains for the week have been depleted against the US Dollar.  The Pound Sterling is standing firm against the Dollar, but more so against the Euro. The driving factor was most likely due to gloomy sentiment about the Euro and the fairly good news reports coming out of the UK.  The Rouble is the worst performer out of the emerging currencies.

As the Nikkei market tumbled 3.1% today on reports of weak output data and poor tech and auto earnings, the global equity markets appear soft.  The Nikkei has been one of the worst performers of the month.  European markest are down slightly today.  The DAX has proven to be one of the worst performers in Europe for the month of January as well.  Gold is at the highest level in three months.

One of the most interesting developments that came out of the Federal Reserve releases yesterday, was that their balance sheet actually shrank by about $110 billion, which under normal conditions for the Fed, represents more than 10% of its balance sheet.  Almost all of it was attributed to the decline in commercial paper holdings.  The Fed bought 90-day commercial paper through the Commercial Paper Fund Facility that opened in October.  Out of the $145 billion of that paper that has come due, roughly 2/3 was not rolled over at the Fed.  Part of this reflects positive developments in the commercial paper market, but the more likely argument is that there may be a reduced need for commercial paper funding in general.  To view other articles like this one, go to www.traderschoicefx.com/blog.

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