Dollar in Retreat after Xmas Break

After the Christmas break, the EURUSD is recommencing where it left off by continuing its corrective action. The pair is presently posting 1.4385 (see hourly chart). The dollar retracted by just over 160 pips against the Euro in the last 48 trading hours of last week amidst relatively illiquid holiday trade.

US Economic releases on Thursday showed further signs of improvement with US Durable Goods orders recording an healthy growth during November whilst the Initial Jobless Claims posted their lowest levels in 15 months. After the very strong Non-Farm Payrolls registered in early December, there seems some evidence that new employment shoots are beginning to emerge. Some caution must still be registered though as we are still in the depths of the holiday season.

With no UK economic risks events towards the end of last week, the GBPUSD continued its fall to 1.5930 although it has now surged back to 1.5980 after the holiday break. Risk appetite will determine if the GBP can sustain this impressive correction.

The YEN is also recuperating against the dollar after giving much ground away towards the end of last week. After the USDYEN hit highs of 91.75, it should be recommencing today’s session at about 91.40