pounds to us dollar made a strong showing on the Barclay's news

Foreign Exchange : The US dollar Exchange Rate is losing ground this morning across the board on a reduction of risk aversion, which was occasioned (oddly enough) by Barclays' saying that it had such strong earnings last year that it doesn’t need to ask the UK government for a capital injection. The foreign exchange market is very thin because of the Chinese New Year that has closed most markets in Asia, and foreign exchange traders are also somewhat confused by the giant rise in oil and gold on Friday. This seems to be the key reason for the Canadian dollar to be coming back strongly against the US Dollar rate.

On Friday the market pared short euro positions for no particular reason we can find except profit-taking and the desire to be square in case something happened over the weekend. During the day, the euro exchange rate rose from 1.2763 before the New York open to a high of 1.3035 in the afternoon before leveling off. Today it slumped until Europe came back in and caused a recovery to 1.3022 so far. If the US market mimics the European market, we could get a test of last week's intermediate high just shy of 1.3100 or 1.3386 from the week before.

Similarly, pounds to us dollar made a strong showing on the Barclay's news, but as the US starts getting active around 8 am, the upmove is already fading. The Japanese yen remains firm although on the north side of a pivot around 88.75, but soft against the euro exchange rate around 116. Sakakibara sees the equivalent of parity (100 yen per euro) at some point soon, so these are counter-trend corrections.