Where The EUR/USD Goes Today

'An early attempt by the USD to push higher failed

to gather muc traction as the European session got underway. EUR/USD failed to sustai a dip below USD1.4500 despite a EUR negative FT report that Portuga faces the risk of a downgrade. While USD/JPY remains off its overnigh lows it continues to struggle to pull back to 92.50. Fridays U payrolls data proved that the market had got too far ahead of itsel with respect to optimism on the US economy. The slowdown in job losse did slow markedly during Q4 (to a monthly average of -69K from -199K i Q3), but the USD was priced for a return to job creation in December t sustain its view that the Fed is on the cusp of changing its polic stance.

Comments from the Feds Bullard in Asian hours that rates would remai low for quite some time were another blow to sentiment to the USD Going forward, the market is likely to come to terms with the outloo that while the worst is likely over for the US economy, 2010 wil likely prove to be a tough year for economic growth. The USD, however is likely to garner some support from the outlook that the Fed i likely to be out of the starting blocks well ahead of the BoJ and th ECB with respect to rate rises this cycle. Now that payrolls data ar out of the way and with this weeks data calendar relatively ligh attention can be expected to turn towards US earnings session whic kicks off today.

Strong Chinese exports data overnight underpinned risk appetite Exports rose 17.7% y/y in December boosting expectations for economi growth in the region. Chinese lending data was also strong. This wil ensure fears remains about the potential for asset price bubbles i China though these fears will be soothed to some extent by measure announced by the State Council aimed at cooling the property market AUD/USD has clawed its way up to USD0.9319 this morning aided by a ris in job vacancies to a 2.5 year high. The strong labour market i rekindling expectations that the RBA could hike rates again in Feb Strong house price data in NZ has helped push the NZD above USD0.7400 USD/CAD, however, has backed off from a test of 1.0250