Overnight Asia/Europe
• Slow start in Asia, USD firms in Europe
• Volumes lighter
• Traders note technical trade and stops again

Today’s Economic Reports
All times EASTERN (-4 GMT)
• 8:30am USD Trade Balance
• 8:30am USD Import Prices m/m
• 8:30am USD Unemployment Claims
• 10:35am USD Natural Gas Storage
• 2:45pm USD FOMC Member Kohn Speaks

Looking Ahead to Friday
All times EASTERN (-4 GMT)
• 8:30am USD Core Retail Sales m/m
• 8:30am USD PPI m/m
• 8:30am USD Retail Sales m/m
• 8:30am USD Core PPI m/m
• 9:55am USD Prelim UoM Consumer Sentiment
• 9:55am USD Prelim UoM Inflation Expectations
• 10:00am USD Business Inventories m/m

Summary
The USD continues its relentless drive higher this morning topping 1.3900 EURO for a new 12 month high against the single currency; Cable has followed lower as well dropping to a fresh 2008 low although not as volatile and ranges are modest. Cross-spreaders across most pairs have given both EURO and GBP more of a push as both pairs were supported in early Asian trade; holding off the lows seen in late New York yesterday. Trader’s note that Russian names were on both sides of the market helping EURO into stops under the 1.3960 area, the pressure remained until another rumored option barrier fell at 1.3900; low prints at 1.3892 taking out our long from yesterday. Traders note that bid interest was thick on the dip and profit-taking by the shorts would likely be the reason. Sentiment remains heavily bearish and analysts are suggesting that the US Economy will recover faster than expected leaving most traders with a continuing impression of USD strength; although the USD is severely overbought at this point. Swissy rallied to a high print at 1.1417 before sellers stepped in; traders report light stops on the way up and a lot of sympathy buying as EURO and GBP fell. Swiss is likely responding to a drop in Oil and commodities prices this morning as traders note Oil flirting with $100/BBL; OPEC yesterday announced a production cut effective next quarter. The Only pair on the board lower is USD/JPY; low prints at 106.72 ahead of the New York open. Stops rumored to be layered under the 106.60 area to 106.40 so far out of range but traders note that a technical failure to close above the 107.60 area suggests that the rate will try for stops under the market. In my view, today’s further advance by the USD on low volumes is yet another clue that the Greenback is over-extended to the upside. Despite poor performance across most sectors in equities, sagging housing data, and high unemployment; the USD is focused on energy pricing which is still at record numbers and euphoria—this isn’t a market that reflects common sense in my view. But as always, the market pricing is always correct. Look for today’s Balance of Trade data to be neutral to the USD. With a slowing economy I don’t see the deficit growing much.