Euro: Strong Data Fails to Please the Market (page 2 of 2)

Like the US, the Eurozone economic calendar is exceptionally light in the coming week. The only potentially market moving report is Eurozone Retail PMI on Friday. Switzerland on the other hand will be releasing the UBS Consumption Indicator and the KoF Leading Indicator.

British Pound: No Relief Yet

There is no relief yet for the British pound which failed to rally for fourth consecutive trading day. Retail sales doubled expectations, but consumer confidence deteriorated. The UK economy is falling into a black hole and that weakness is being reflected in the British pound. At this point, the UK will need to lower interest rates again in the coming year as the credibility of the country's new Prime Minister is tested. The recent developments in the UK and the British pound are a perfect reflection of what could be in store for the Euro. If data starts to turn so will market sentiment. In the week ahead, we are only expecting housing market reports from the UK. This includes Nationwide house prices and BBA loans data.

Strong Gains for Canadian, Australian and New Zealand Dollars

Canadian GDP and retail sales were stronger than expected in the month of October, triggering another day of gains for the loonie. This is the sixth consecutive day of strength for the currency pair , which up until last week was undergoing a near vertical reversal after hitting an all time low of 0.9059 on November 7th. The Australian dollar is also stronger thanks to a nice jump in the Conference Board Leading indicators report and new motor vehicle sales. Even the New Zealand dollar benefitted from a rise in credit card spending. In the week ahead, we have no Canadian or Australian data due for release, but New Zealand will be reporting their November money supply figures.

Dow Rises 200 Points, USDJPY Hits One Month Highs

Wall Street's preholiday rally has helped to take all of the Japanese Yen crosses higher. There was no economic data released from Japan overnight, but they will be the only country releasing economic data on Monday and Tuesday. These reports should not be market moving however because most traders will be out for the holiday. Meanwhile sovereign wealth funds continue to dominate the headlines with Singapore's state-owned Temasek Holdings planning to inject $5 billion into Merrill Lynch. They have become the new saviors for banks who have been badly burned by subprime losses. Expect this new trend to continue.