Source: Forex.com
It was a holiday in some parts of the world, but in currencies it was business as usual. Last week's USD rally continued as EUR/USD broke through 1.5400 and USD/JPY traded towards 100.00. Lower commodities like oil and gold have been contributing to the USD bid tone as well as well as signs that the credit conditions in the US are spreading to other parts of the world. JPY crosses were choppy despite S&P futures pointing to higher equity markets. In the past the two have been highly correlated but that relationship has diminished recently.
Looking forward, it should be another interesting week after the historical events of last week. We have a slew of economic data including US new and existing home sales as well as consumer confidence. While equity markets are trading off their lows, we could continue to see slowing economic data pointing to a recession. However, this is not necessarily negative for the USD if the slow down is global. Given the multi-year move lower in the USD, another week of USD strength isn't out of the question.
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