Current happenings in Forex Market!

On Friday the Euro strengthened against the US Dollar and the Pound after EU leaders agreed on a financial aid package for Greece. The deal includes funds from the International Monetary Fund and totals around 22bn Euros which could be made available to Greece should the country have difficulty borrowing money to service its high level of debt.

Against the US Dollar the Euro rose by more than one cent to $1.3422 before falling back slightly to close trading at $1.3414 before the start of the weekend. It rose around two-fifths of a cent against Sterling to close trading at GBP 0.9003.

On Wednesday the Euro had fallen to a ten month low against the US Dollar amid fears a deal would not be reached after Germany indicated Greece did not need assistance. This followed close on the heels of a credit downgrade for Portugal which further weakened the currency.

The deal may allay fears that the problems which Greece has experienced could spread out to affect other countries in the Euro Zone. Following the announcement that a deal had been reached yields, that is the interest rate investors are paid on loans to the government, on Greek bonds fell slightly, an indication that investors viewed them as slightly less risky. Analysts feel the real test will come when Greece hold its next sale of government bonds which will almost certainly happen in the coming weeks. This will be a crucial test for Greece as well as setting the tone for what is to come in the Euro Zone.

According to Moody's credit rating agency, disagreement among Euro Zone partners could undermine the deal: "The key credit question is whether market confidence will be strengthened by the support package, or whether it will be weakened by the contentious conditions under which this package was agreed."

Further concern that the EU's rescue plan could fail arises from concerns that EU leaders may have underestimated how great the problems facing the Euro Zone are. This particular plan was drawn up in response to the Greek crisis, however there are many other members who are struggling, most notably Ireland, Spain, Portugal and Italy. Greek Prime Minister George Papandreou must now prove that he can keep the nations finances afloat as failure to do so could spark a fresh crisis and trigger the use of the aid package. Looking forward the Euro will remain heavily dependent on smooth market conditions in the short term to immediate future.

Across the water in the US, Friday saw the news that the US GDP was revised downward to an annualized rate of 5.6% for the last quarter of 2009. It was revised down from 5.9% according to figures released by the US Commerce Department.

The main factors which brought about the revision were lower levels of personal and government spending and lower levels of investment. The figure is up significantly on the 2.2% annualized rate of growth seen in the third quarter of 2009, it is also the strongest reported since the third quarter of 2003. The Commerce Department said that the pickup in inflation adjusted growth or 'real GDP' reflected rebounds in business investment in equipment and software as well as net exports.

In Japanese retail sales jumped sharply in February as government stimulus measures encouraged consumers to spend, official figures have shown. Sales rose by 4.2% from a year earlier, much more than analysts had expected. The rise happened despite falling prices in Japan, which usually encourage consumers to spend less and wait until prices fall further. Analysts said the rise was unsustainable given the deflationary pressures in Japan.

"Given the stagnant income situation, this sizeable rise in retail sales is too good to be true," said Seiji Shirashi at HSBC Securities in Tokyo. "Some government stimulus measures will continue until April and others will last until September. After these incentives expire, there should be a big negative rebound in retail sales".

On Friday the Yen fell for the fourth straight day against the Euro, its longest losing streak in five weeks as the global recovery gathers momentum boosting demand for higher yielding assets. The Yen fell to JPY 124.41 against the Euro on Friday.

In the wake of last week's budget announcement in the UK opinion polls are still showing no clear lead for either party. Pundits feel the General Election is unlikely to be called before the Easter break with a date in early May looking more likely. On Friday Sterling held on to its gains from earlier in the week, climbing 0.60% against the US Dollar to close trading at GBP 1.4894.

This week sees a relatively slow start to the week in terms of data but things will pick up on Wednesday and the end of the week will bring the release of the US Non Farm Payrolls and Unemployment reports as well as the Good Friday holiday in most trading centers.

A Shameful day for Pound!

In the UK yesterday economists warned of a "sluggish" recovery in the economy this year, ahead of tomorrow's Budget. The Confederation of British Industry said it expected the economy to grow by 1% in 2010, with the recovery remaining subdued until the middle of next year. The government forecasts growth of 1.25% this year and 3.5% for 2011. However the Chancellor, Alistair Darling, may revise those predictions in the Budget tomorrow.

After the report was released the Pound weakened further against both the US Dollar and the Euro, it closed trading down 0.36% against the Euro at EUR 0.8978.

British Consumer Price Index data is due to be released later today. Governor King from the Bank of England said yesterday that first quarter inflation was likely to be in line with the Banks forecast of 3.1%

Chancellor Alaistair Darling has reiterated there will be "no giveaways" ahead of the general election. The budget is expected to focus on encouraging private sector investment and securing long term economic growth. The government plans to halve the budget deficit - which is one of the highest in Europe and is expected to hit about 12.6% of GDP this financial year, well above the European Union threshold of 3% - over the next four years.

The Pound has had its worst annual start in the forex trading market in 13 years, dropping 7% against the US Dollar since January. The currency has been weakened by uncertainty regarding the outcome of the general election which Prime Minister Gordon Brown must call by June. The government was forced to borrow heavily during the recession resulting in one of the highest deficits in Europe. Mr. Darling has said that while there had been signs recently that the economy was improving, with unemployment falling and government borrowing lower than forecast there was still a lot of uncertainty.

He said “the mood of the times is not for giveaways. People are not daft, they know perfectly well we need to get borrowing down and secure (economic) recovery”.

The uncertainty about who will win the election and whether there will be a hung parliament has resulted in a bearish trend in Sterling. A minority government is looking increasingly probable according to recent UK opinion polls and sentiments are sharply divided between the Labor and Conservative parties on how to achieve the necessary spending cuts.

Elsewhere the Canadian Dollar fell for a third day, the longest losing streak since January as crude oil prices continued to fall. The loonie rose in 12 of the last 16 sessions to reach C$1.0062 last week, the closest to parity with the U.S. dollar since 2008. It has risen 3% this month for the second best performance among the 16 most traded counterparts against the US Dollar. South Africa’s Rand which also relies on commodities for export revenue preformed best.

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US National Capital Long Term Purchases Report Released!

The US National Capital Long Term Purchases report was published yesterday. This indicator represents the difference between foreign investments in the US and US investments abroad and demonstrates foreign confidence in the US economy. Figures showed that Net foreign purchases of long-term securities slowed markedly in January according to the Treasury Department. Total holdings of equities, notes and bonds increased a net $19.1 billion in January. This is down from $63.3 billion in the previous month. The figure had leaped to $126 billion two months ago, but was then cut to half.

The Dollar closed down significantly against the GBP in the wake of this forex trading news. It started the day trading at 1.5774 against the Pound but slid to 1.5044 at the close of the day. It also dropped against the Euro, although not as significantly, opening trading at 1.3762 before going on to close at 1.3758.

Elsewhere in the US manufacturing in the New York region expanded in March for an eighth straight month, indicating factories are sustaining production and lifting the U.S. economy. The index plunged in December but has since recovered. The report showed orders, sales and employment increased in March, a sign that manufacturing gains may last for months and help spur the rest of the economy.

The Empire State index is of interest to investors and economists primarily because it is seen as an early indicator of what the Institute for Supply Management's March national factory survey due out in two weeks may show. In February, the ISM manufacturing index inched lower to 56.5 but continued to point to solid growth in the factory sector.

US Dollar ready to face Retreat on all sides!

Last week saw the Dollar retreat on most fronts. The week ended with the USD down 2.07% against the Euro and down 2.25% against the GBP. The week ahead will be dominated by US announcements, chief amongst them being the American Fed rate decision, due out on Tuesday at 18:15 GMT.

An absence of job growth and few signs of inflation are reasons why Federal Reserve policy makers may decide to keep interest rates near zero.

Later today at 1300 GMT the Treasury International Capital Long Term Purchases report will be announced. This gauge represents the difference between foreign investments in the US and US investments abroad and shows foreign confidence in the US economy. The figure leaped to $126 billion two months ago, but was then cut to half. This time, it’s expected to stand at $38 billion.

Last week ended with Friday’s release of the University of Michigan preliminary Consumer Sentiment Index. This revealed that confidence among U.S. consumers unexpectedly declined in March, for the second month in a row. This is a strong signal that Americans are discouraged about the labor market. The prelim CSI fell to 72.5 from February’s final reading of 73.6. Economists had previously predicted that the index would increase to 74.

A separate report from the Commerce Department in Washington, also on Friday, showed that the U.S. retail sales report for February was better than expected. However, downward revisions to January sales numbers poured cold water on the result. Retail sales increased 0.3% in February and while stronger than the 0.2 percent decrease projected by economists, figures for the prior two months were revised down. January sales were revised downward to 0.1% overall.

The euro gained, bolstered by a decrease in German government bonds. The Greek debt worries are easing as the European governments continue to take action to contain the crisis. The EUR/USD forex pair traded at a high of 1.3687 and a low of 1.3620. After three consecutive days weakening against the euro and the dollar, the pound sterling was finally able to post gains. This is largely due to the inflation rates, which have risen to the highest point in over one year (since November 2008).

In Canada, the outlook was positive as more jobs than expected were created in February and the jobless rate fell to a 10-month low, cementing Prime Minister Stephen Harper’s view that the economic recovery is under way. The Canadian dollar surged after the report, strengthening to its highest level since July 2008-the Lonnie closed trading standing at $1.0191 against the USD on Friday. Employment rose by 20,900 last month, the fifth gain in seven months, Statistics Canada said. The rate of unemployment fell to 8.2 percent.

Over the weekend both the US and Canada moved in to daylight saving time. This is expected to have a significant impact on the forex trading market for the next two weeks as the major sessions between the US and the UK will overlap for five hours a day instead of four. During this time traders will have less time to react to data released in the British market before US data is released and can expect to see increased levels of volatility in the market.

Forex Trading Updates

The Euro surged to a 2-day high against the U.S. dollar yesterday, as a wave of risk demand swept the markets in the wake of upbeat economic data from both the United States and China. After suffering losses against several of its major counterpart yesterday, the USD continued to fall as the dollar index traded at 80.441 this morning, down from 80.484 late last night.

Later today (1330GMT) the U.S Department of Labor will release its first Unemployment Claims report after the release of the Non-Farm Payrolls. The market predicts that the, jobless claims will show a slight improvement – a drop from 469K to 452K, pushing the U.S dollar higher.

Also out today (1330GMT), the US and Canada will simultaneously release their trade balances. This double-feature release always triggers action in USD/CAD. For a third month the U.S trade deficit is predicted to widen slightly from 40.2B to 40.9B, as imports are expected to have grown faster than exports. North of the boarder, the market forecasts that Canada’s trade deficit will cross into a surplus of 0.3B.

Yesterday, the USD/CAD touched on a 5 month low, as the Canadian dollar continued to rise for the ninth straight day against its neighboring U.S. currency - the longest streak since 2004. The Loonie continued to trade at its strongest level in almost two months as crude oil, the nation’s largest export, neared $82 a barrel.

Tomorrow, Statistics Canada will release the nation’s unemployment change. Last month, the unemployment dropped to 8.3%, following a rapid surge in jobs of 43,000. The market expects that the number of employed people will increase by 17.5K in February, holding the unemployment rate steady at 8.3%

Risk Appetite helped US Dollar, other Currencies seems Volatile!

After closing down against the USD, for the 6th time out the past seven weeks, the Euro appreciated against 11 of its 16 major currency counterparts following French comments that helped aid risk appetite. Following the meeting between the French President Nicolas Sarkozy and Greek Prime Minister George Papandreou, the French President reportedly vowed to help Greece if needed and pledged to crackdown on market speculators targeting the country. The EUR/USD, however, has been having rather mixed reactions and continues to remain within its consolidation phase as the highly traded pair has been unable to rise toward last Wednesday’s highs of 1.3735 in the forex trading arena.

The Japanese Yen rose against the Euro, snapping a two-day drop, on speculation that Japanese companies are bringing home overseas earnings before the nation’s fiscal year ends this month. The Yen appreciated against all of its 16 major currency counterparts following China’s foreign-exchange regulator statement that speculative capital is flowing into the country, fueling optimism the funds will also boost neighboring economies. The Yen rose to 122.58 per Euro early this morning (6:38 GMT), from 123.13 per Euro in New York yesterday when it dropped to 123.90 per Euro, the weakest level since Feb. 23. Japan’s currency gained against the US Dollar, jumping from yesterday’s 89.99 to 90.31 this morning.

Across the Pacific, Australian business confidence increased in February for the second month in a row, adding to signs the economy is strong enough to sustain higher interest rates.Shortly after midnight, the National Australia Bank Ltd. (NAB) reported that both business confidence and conditions continued to strengthen in February to hit a four month high. The NAB business confidence index gained 4 points to plus-19 points in February, matching last November’s seven year high. Business sentiment in Australia is strengthening amid a rapid increase in Asian demand for Australian natural resources namely iron ore, increasing the chances that the RBA will likely raise the benchmark interest rate next month for the fifth time in six meetings. Australian advertisements for job vacancies jumped in February by the most in more than a decade as increasing Asian demand for raw materials stokes demand for skilled workers. Early this morning, the Australia & New Zealand Banking Group Ltd. (ANZ), reported that jobs advertised in newspapers and on the Internet climbed 19.1% from January, when they fell 8.1%. The increase was the biggest monthly gain since the index began including ads on the Web in 1999.

Yesterday the AUD/USD moved above the 0.90 range. Following the release of this positive economic data, the pair jumped to 0.91075, up 0.23% from the day’s open.

Later this morning (1130GMT), Australia will release the Westpac Consumer Sentiment- Survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases. This indicator isn’t stable – it fell by 2.6% after rising by 5.6% beforehand. A slower rise is predicted this time.

NFP still seems to be Confused: Unemployment rate up by 0.1% to 9.8% in US

Last Friday, the US Bureau of Labor Statistics released the highly anticipated Non-Farm Employment Change, marking the end of one of the busiest weeks for the forex trading market this year.

While the U.S Non-Farm Payrolls (referred to as NFP) declined for the 25th time in the past 26th months, the world’s largest economy shed a smaller-than-expected 36,000 jobs throughout February - to a seasonally adjusted 129.5 million. For over the past year, this vital economic indicator has consistently showed a drop in the number of employed Americans. While last month analysts predicted that the NFP would re-enter positive territory and the number of employed Americans would increase by 10K, the Non-Farm Payrolls continued to fall throughout January by 20K.

Economists had predicted that the NFP for February would fall by an additional 56,000, pushing the unemployment rate up by 0.1% to 9.8%. However, Friday’s NFP showed that U.S employers cut a smaller than expected 36,000 jobs throughout February, leaving the unemployment rate steady at 9.7% - bolstering views that the labor market is on the brink of a full economic recovery.

Your browser may not support display of this image. The dollar posted its biggest five-day gain versus the Japanese Yen in two weeks, as risk appetite returned to the market following the better than expected NFP. Last week the greenback rose 1.5% to 90.28 Yen, from 88.97 on February 26th. Following the announcement of the NFP, the USD gained as much as 1.76% against the yen, the biggest intra-day move since December 11th of last year. The volatile pair closed at 90.265, up 1.3% from the day’s open.

The Canadian dollar posted its biggest weekly gain in two months versus the greenback as the improvement in its largest trading partner’s outlook could provide a boost for Canada’s economy. The USD/CAD pair fell 0.19% on Friday, as the Loonie rose to a six-week high of 0.972USD. Later today (1315GMT) will publish the number of Housing Starts for February - the number of new residential buildings on which construction was begun during the previous month. Economists expect 190,000 starts, annualized basis, up from 185,600 the previous month.

Some Strong Moves in the Forex Market!

The Euro rose 0.64% to $1.36938 against the US Dollar yesterday as Greece unveiled a new austerity package. Since news broke of Greece’s 300bn Euro debt, the single European currency has been tumbling against its major counterparts – striking a 10 month low against the dollar, this past Tuesday.

Yesterday the Greek government unveiled an austerity package worth 4.8bn Euros -a host of tax increases and spending cutbacks. Greek government officials hoped this will bolster the Euro in international markets and convince European leaders that they are doing enough to merit a possible bailout.

Retail Sales in the 16 country zone slipped in January, raising new concerns about the strength of the area’s economic recovery. According to Eurostat, sales volume within the Euro Zone fell 0.3% from December and was 1.3% lower than in January 2009. While the monthly drop in sales was weaker then the market expectations of -0.5%, economists warned that sales could continue to fall in February.

The weakness of this data cemented expectations that the European Central Bank will keep its benchmark interest unchanged at its current record low level of 1.0% (announced later today at 1245GMT). The announcement will be followed by a press conference and there is speculation that the ECB may announce that it will lend covered bonds to financial institutions as part of a strategy to increase collateral. The press conference will be closely watched by traders as it has the potential to cause huge volatility in the market due to the off the cuff format.

Across the Channel the British Pound rose across the board, appreciated against 13 out its 16 major currency counterparts – including gaining a record 0.89% against the USD, to close at $1.50959. This abrupt increase came after the Services PMI unexpectedly jumped to 58.4 from 54.5 in January. The UK dominant services sector expanded sharply to more-than-a-three-year high in February, boosted by strong new orders and business activity- adding evidence that the first-quarter GDP grew at a faster pace than in the final three months of 2009. According to senior economists at the Market, this latest piece of data highlights the underlying trend that in the private sector remains positive, and is on course to deliver a quarterly expansion above 1.0% in the first quarter. According to economists, this positive survey will reinforce the expectation that the Bank of England's Monetary Policy Committee (MPC) will not be extending its £200bn quantitative easing (QE) program (1200GMT).

At noon today, the BoE will announce whether or not it will raise its benchmark rate from its record low level of 0.5%. Forex Trading Analysts predict that the central bank is unlikely to raise change interest rates, as any raise in the cost of borrowing could jeopardize the country’s fragile economic recovery.

On the other side of the Atlantic, U.S companies, in February, cut the fewest amount of jobs in the past two years. Yesterday’s ADP Non-Farm Employment Change reported decline of 20,000, slightly higher than analysts’ prediction of -15,000, follows a revised 60,000 drop in the prior month. The results of the ADP show that companies are still hesitant to add workers until they see sustained gains in sales as the U.S emerges from the worst recession since the 1930’s. This ADP report is generally considered a predictive index for Friday’s highly awaited Change in Non-Farm Employment Change. After a slight improvement in January, the number of employed Americans is expected to fall by another 40,000.

The U.S economy continued to show signs of recovery yesterday as the, ISM non-manufacturing index rose to its highest reading since December 2007. The index increased to 53 in February from 50.5 in January - a sign that the pickup in the manufacturing is trickling down into the rest the rest of the economy.

Later today, the National Association of Realtors will announce the monthly Pending Homes Sales. The number of contracts to buy previously owned U.S. homes is predicted to have risen a mere 1.4% in January, showing the extension of a tax credit is producing a limited effect on the housing market. The renewal of a government incentive to first-time buyers, originally due to expire at the end of November, and its expansion to include current owners has yet to lure buyers back into the market after helping boost sales in 2009. A lack of jobs and mounting foreclosures have depressed confidence, indicating housing will take time to rebound.

The US Dollar closed down against major currency counterparts, particularly commodity base currencies. The CAD advanced for a fourth consecutive day against the greenback, gaining a total of 0.438% over the course yesterday, as higher crude jumped to $80.66/barrel and gold touched its highest level since January 15th. Later today, Canada will release its Ivey PMI- generally considered a leading indicator of economic health.

The week will cap off tomorrow with the release of the U.S unemployment rate – expected to increase to 9.8%, from its current level of 9.7%.

Market gears up for a very busy end to the week: ECB minimum bid rate and BoE official bank rate out tomorrow, followed by US Non-Farm Payrolls on Fri

Past Events:

• CAD Overnight Rate out at 0.25%, versus expected 0.25%, prior 0.25%
• AUD Cash Rate out at 4.00%, versus expected 4.0%, prior 3.75%
• AUD GDP q/q out at 0.9% versus expected 0.9%, prior 0.2%
• GBP Construction PMI out at 48.5, versus expected 48.9, prior 48.6
• GBP Nationwide Consumer Confidence out at 80 versus expected 71, prior 73
• EUR German Retail Sales m/m out at 0.0% versus expected -0.5%, prior 0.9%

Upcoming Events:

• GBP Halifax HPI m/m (march 3rd-5th)
• GBP Services (0930GMT)
• EUR Retail Sales m/m (1000GMT)
• USD ADP Non-Farm Employment Change (1315GMT)
• USD ISM Non-Manufacturing PMI (1500GMT)
• AUD Trade Balance (tomorrow 0030GMT)
• GBP Official Bank Rate (tomorrow 1200GMT)
• EUR Minimum Bid Rate (tomorrow 1245GMT)
• USD Non-Farm Employment Change (Friday 1330GMT)

Yesterday, the U.K released its construction PMI, showing a fall from its previous level of 48.6 to 48.5 (a number greater than 50.0 indicates expansion, while number below shows contraction). Early this morning (930GMT), the U.K will release its Service PMI- while this report is the last PMI for the week, it is the most important. The service sector, which includes the financial sector, was improving up until last month. After falling to 54.5, analysts predict a slight increase of 0.5 points this month, to a new level of 55.0.

The U.S dollar weakened across the board in Forex market, falling against 15 of its 16 major currency counterparts, following the release of the Bank of Dallas Fed Chairman’s statement that borrowing costs should continue to remain low until the economy picks up- which according to him “won’t happen for some time”.

Later today (1315GMT), the U.S will release its ADP Non-Farm Employment Change. While generally considered a predictive index for Friday’s highly anticipated Change in Non-Farm Payrolls, the ADP is expected to show a drop of 15K. With Payrolls have declined in 24 out of the past 25 months and economists are predicting another decline of 40,000 in February.

Today's Forex Market Moves!

Past events:

* USD ISM Manufacturing PMI out at 56.5 versus expected 57.7, prior 58.4
* GBP British Manufacturing PMI out at 56.6, versus expected 56.3, prior 56.6
* EUR unemployment rate out at 9.9%, versus expected 10.1%, prior 9.9%
* CAD GDP m/m out at 0.6%, versus expected 0.4%, prior 0.4%

* AUD Cash Rate out at 4.0%, versus expected 4.00%, prior 3.75%
* AUD Building Approvals m/m out at -0.7% versus expected 0.1%, prior 2.2%
* AUD Retail sales m/m out at 1.2% versus expected 0.8%,prior -0.7%

Upcoming Events:

* GBP Halifax HPI m/m (out between March 2nd to 5th)
* GBP Construction PMI (0930GMT)
* CAD overnight rate (1400GMT)

* GBP Nationwide Consumer Confidence (tomorrow 0001GMT)
* AUD GDP q/q (tomorrow 0030GMT)

* EUR Minimum Bid Rate (Thursday 1245GMT)
* GBP Official Bank Rate (Thursday 1200GMT)

The Euro continues to rally on the back of an anticipated bailout for the Greek debt crisis. Olli Rehn, the EU Commissioner for Economic and Monetary Affairs visited Greece and asked the government to announce new measures in the coming days.

Following Mr. Rehn’s comments, the Euro appreciated slightly against the USD, gaining 0.15% to reach a $1.35930. While reports suggest that German banks might help Greece by buying more Greek bonds, German Chancellor Angela Merkel denied the existence of such a plan, saying that Greece needs to sort out their own deficit problems.

Greek officials are expecting to seal a deal by Friday, when Greek Prime Minister George Papandreou is to meet with Angela Merkel in Berlin – the meeting will determine if what if any, Europe-wide assistance Greece receives.

The U.S. dollar surged against most other major currencies on Monday, after data showed the U.S manufacturing sector grew in February, although at a slower rate than expected. Manufacturing expanded in February for its seventh consecutive month, confirming that the world’s largest economy is emerging rapidly from the recession.

The greenback was up against the pound and euro, with GBP/USD plunging 2.04% to hit 1.4930 and EUR/USD shedding 0.64% to hit 1.3536. It also rose against the yen and Swiss franc, with USD/JPY rising 0.33% to reach 89.16 and USD/CHF gaining 0.72% to hit 1.0813.

U.S economy Beat Expectations

Following a six consecutive week run of gaining against the Euro, the U.S. Dollar closed on Friday down against the single European currency, posting a 0.136% loss from last week’s opening price, as worries of Greece’s debt crisis began to ease and Forex trading investors felt better regarding the Euro-zone economies.

Last week ended with the United States’ Department of Commerce announcing that U.S economy beat expectations for the last three months of 2009, and expanded at a seasonally adjusted rate of 5.9%. This rise in the Prelim GDP for the fourth quarter of last year marks the best performance for the past six years, further reflecting a rise in business investments as well as an increase in contributions from inventories. However, while the U.S economy grew slightly faster than predicted, the revision to the GDP shows that final sales within the U.S were actually weaker than those reported a month ago – as almost two thirds of the GDP’s growth was due to change in inventories, not final sales. Despite this greater than expected growth, the greenback tumbled against the Euro on Friday, as traders sold the USD to cover extreme euro short positions as speculation increased that Europe’s debt problem could soon be resolved.

Later in the day, the National Association of Realtors announced that the resale of homes and condos within the U.S plummeted 7.2%. While analysts had predicted a slight increase, sales of existing homes took a turn for the worse slipping to a new seven month low of 5.50million. After steadily rising throughout the fall of last year, sales of existing homes have fallen for the past two consecutive months. This unanticipated decrease further fueled concerns about the strength of the housing market recovery, as it follows a sharp decline in the sales of New Homes, which reportedly slipped to their lowest level on record for January.

However, The U.S. dollar index edged higher in the Asian trading session today rising to 80.42, supported at the margins by the better an anticipated GDP. Later today, the U.S. is set to publish (1500GMT) the much anticipated ISM Manufacturing PMI. For the past few months, this heavily watched purchasing managers index has been on the rise, last month jumping as high as 58.4 – this month analysts are expected it to slip back down to 57.9