Dollar bulls pushing against the Euro and Aussie

Whoa! Talk about some insane movements! Looks like dollar bulls have finally attacked the market!

Seems like all this talks between the US and China on foreign exchange policies is showing its effects on the markets.

According to Geithner, upward pressure on the yuan will end up in higher inflation and asset prices if the currency won’t move. He also states that China will be more confident in allowing the yuan to rise if competitor’s currencies rise too.

Euro continues its way down and breaks the strong support of 1.3650! Seems like all the concerns over the Eurozone sovereign risk is at hand. Yields on 10 year irish bonds continue to rise over comparable german debt.

On the otherhand Sterling still held up strong, due to the QE being priced out following BOE inflation report. But we have to watch how UK data comes out in the coming weak as it comes out worse, QE may end up being priced in again.

Data Today:

German GDP – 7am GMT

Eurozone GDP – 10am GMT

Eurozone industrial production – 10am GMT

University of Michigan confidence – 2.55pm GMT