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Monday, April 24, 2006

FX Closing Comments

The Dollar remained under pressure today,as trading deficits took center stage. After comments from the G7 about the world's trading imbalances, the Japanese Yen rallied strongly, as a proxy for the Chinese Yuan, which does not trade freely. International agencies are bothered by the size of the U.S. trade deficit and its overall effects on capital markets. Today's news provoked the Yen to rally against the Dollar and Euro. The surging Yen prompted a wider bout of Dollar softness, which caused the greenback to slide against all majors. There remains a lot of data on the calendar this week and matters could quickly reverse.