Daily FX Wrap Up

While the US Dollar had a bit of a sad Valentine’s Day, the rest of the world’s markets received their fair share of cards in the form of little green pieces of paper, with substantial gains coming on the heels of a variety of news reports and market indicators pushing the US Dollar to new multi-week lows. The Euro moved above resistance and jumped to a high of 1.315 – a 125-pip move on the day. Federal Reserve Chairman Ben Bernanke’s semi-annual testimony to the Senate Banking Committee offered insight into the goings-on of the Federal Reserve, triggering a large move across the majors. Later in the day, the market zoned in on the specific phrase that there are initial signs that “inflation pressures are beginning to diminish.” This dovish comment specifically attacks one of the last footholds Dollar bulls have for expecting a return to rate hikes by the end of the year. Bernanke repeated his projection of a possible positive turn in housing, leaving the consumer population to foot the bill for economic growth. Moving to another economic indicator, January Retail Sales fell short of expectations, with no gain whatsoever. This is the first time that inventories have not moved since July of 2005. The GBP/USD breached the 1.9600 mark to hit a high of 1.9645. The Kiwi moved with steady gains and closed out the American session at .6945. Last but not least, the EUR/USD is trading at 1.3127 to close out the current session. XPRESSTRADE Analyst, David Hilgeman