Forex - U.S Trade deficit hoorah is short lived as retail sales are set to disappoint.

Forex News and Events:

The dollar corrected from a five-week high against the Euro on speculation today’s Retail sales and manufacturing output would show the ravages of a widespread recession. The dollar fell for the first time in 4 days against the Sterling after Federal Reserve Chairman Ben Bernanke stated fiscal policy alone was insufficient to quell the fires of a deep recession. He also said the U.S Government didn’t rule out further capital injections and guarantees may become necessary to stabilize financial markets. The Euro gained against the dollar as the German government announced a further EUR50Bn over two years to bolster public investment in infrastructure. The EURUSD rose from yesterday’s lows of 1.3150 to 1.3336 before the dollar fought back, bringing the pair into 1.3240 territory – the 61.8% retracement on the previously mentioned move. Cable saw a move take it from Friday’s highs of 1.5351 to 1.4471 last night before seeing the Sterling rise sharply in the night, briefly touching 1.4708 but not holding (coinciding with the 23.60% retracement on the Jan 9 – Jan 13 move) before falling sharply again to 1.4492. The statement by Morgan Stanley that the banking Giant HSBC would have to raise capital and slash it’s dividend sent European stocks south, continuing a 6 day losing streak. Energy and commodities rally back from a day of weakness as Gold rose from yesterday’s lows of $814/oz to end the day at $821/oz after going as high as $831.08/oz during the afternoon. Crude traded very much the same way from a low of $36.10/bbl to a high of $39.50/bbl yesterday – a 9.4% rise as OPEC says it will cut production further in March if demand continues to be low to bring prices back into line.