The declines of the equities markets could contain the current market sentiment of the currency market pushing the USD higher across the broad and the news of buying a higher stake percentage of citigroup could not make a serious change today but the doubts about the impact of the banking nationalizations movement in US to stimulate the wanted demand to restabilize the economy could contain the current market sentiment today. The pessimism controlled the markets giving a feeling to the investors that the turning back point may not be close and it can be farer than what was expected. The gold is still holding its gains above 970$ and the US treasuries were underpinned by Dow loses which gained momentum after breaking
7550 and closing under it last week. These bearish signs reinforced the way down.In this same time, the single currency is still suffering from the banking and financial loses on the credit crisis impact on the European eastern economies and from another side the single currency interest rate outlook differential versus the greenback is still putting weights on it as we wait another .5% ECB cut next month and the interest rate in US has become nearly 0% and there are no further rooms for monetary easing aggressively in US to put weight on the greenback.
We wait today for the release of IFO germane business climate index and it is expected to be 83.2 in Feb from 83 in Jan and from US, we seriously wait for the release of US Feb consumer confidence and it is expected to be 36 and Ben Bernanke's statement about the economy and the fed's next policies in the face of the persisting recession and deflation forces in US. The recent minutes of the Fed's last meeting release last week have shown the markets that the turning back points can be farer than what the fed was expecting.
Best wishes
FX Consultant Walid Salah El Din E-Mail: snipped-for-privacy@fx-recommends.com