Daily Market Update 07/04/2008

Asia Session
Published: April 7, 2008 1:03 AM

What won't go down must go up? Well that's what we saw tonight in the start of the trade week with the US Dollar. With the Greenback on the mats and being given the 10 count, it picked itself up and started fighting back. The dollar made its biggest move in over a week on the thought that future interest rate cuts may be limited due to rising inflation in the US. The dollar made gains against the Euro, Yen, Pound and Swiss Franc.

In a rather dramatic fashion, the dollar took off against the Yen, sending USD/JPY from early session lows of 101.50 to late session highs on near 102.60. The Yen crosses followed suit with gains. Yen weakness can also be attributed to the falling popularity of Prime Minister Fukuda, whose approval rating is a mere 24%. As the dollar got stronger the Euro fell from the 1.5730 range to lows near 1.5650. USD/CHF made a nice run to reach session highs near 1.0120. The pair to buck the dollar trend was USD/CAD which slid to the 1.0068 neighborhood. Australia had a weak Trade Balance number signaling a record trade deficit, and that coupled with higher inflation pushed AUD/USD lower.

The big picture on the horizon is The G7 meeting in Washington this week. As usual it will be a wait and see approach to see if any members come out and comment on the forex markets. With the Dollar Index down 5.8% so far this year and talk of it getting pummeled even more, it would be a lark if comments aren't made.