N America Summary and Highlights 28 Dec

North America 
Early U.S. Trading saw the USD drifting, as the jobless claims was not a game changer and the focus is switching to next week’s key U.S. economic data.  The USD then bounced off the low, as global bond yields drifted higher on a sense that the November/December optimism could be getting ahead of the Fed. Additionally, some U.S. money market tightening before year end also helped lift the USD off the lows.  Finally, USDCHF stalled before 0.8320, while USDJPY bears thought a test of 140.00 could require new news.  Into next week, opinion is mixed with the USD sentiment negative, but the USD oversold.   

Europe 
European trading saw a soft start for the USD, as sentiment and end of year flows kept the USD on the defensive.  However, consolidation kicked in by mid-morning after the Asian losses.  Traders do want to test 140.00 on USD/JPY and some feel that this could occur this week given recent momentum.  While the main short-term focus is the Asia surge in the JPY, the USD also remains soft against European majors.  Once again USDCHF is moving ahead of EURUSD and GBPUSD, with EURCHF having dipped down to 0.9320 in Europe.  However, traders note that once end of year flows pass, that the USD could see a brief bounce in the New Year.  For the CHF, USD/CHF is key, as the supports on EUR/CHF are weaker than the key 0.8320 on USD/CHF.