The net effect of these factors was a weak US Dollar

!! Daily Forex News !!
A couple of things happened yesterday that moved the markets. Firstly,
the Euro had a good day in which traders largely ignored concerns over
Greek default rumours but instead focussed on the success of the
Portuguese government debt auction. That was well received by the
markets and the Euro strengthened as a result. Secondly, the US Dollar
had a bad day at the office as traders prepared for last night's
release of the Chinese economic growth data. Views were mixed as to
the likely impact of positive or negative data but the initial
decision was clearly to be short of US Dollars going into the release.
The net effect of these factors was a weak US Dollar and a small scale
rally in the Euro against both the Pound and the US Dollar. Sterling
didn't have a particularly bad day but it did drop against the Euro.

This was after a mixed set of UK unemployment data. The number
claiming unemployment benefits didn't alter significantly and the
headline unemployed rate was static at 7.9% but the report
disappointed analysts who were expecting an economy in the early
stages of recovery to post larger employment growth numbers.
In the Euro end of these exchange rates, the markets have been
surprised that the EU finance ministers who have been meeting this
week were not able to agree a specific set of measures to amend the
European Financial Stability Facility; Europe's financial support
package for troubled economies. They really shouldn't have been
surprised; the countries with funds to put into the scheme have a
certain set of requirements and those who might draw from the pot have
a completely different set. Battle lines are drawn but the lines are a
tad blurry and the negotiations will continue.

Anyway, back to those eagerly anticipated Chinese numbers, well the
Chinese economy grew at a stratospheric 10.3% in the year to the last
quarter of 2010. That was well above expectation and heaps even more
emphasis on President Hu's visit to Washington to see if the US and
China can work better together. I am sure there were wry smiles in
China when President Obama, the President of a country only a couple
of centuries old, suggested China, a country with millennia of
documented history and culture, could 'evolve'. He was talking
about human rights and the point is a valid one but I am sure the
Chinese authorities won't have liked the suggestion that they are
yet to evolve. Either way, the US administration would appear to be
far more focussed on improving US trade with China than getting bogged
down on matters of human rights.

In the end though, China is expected to make further attempts to slow
its economy and perhaps even to allow the Yuan to strengthen.... a
little. The former is bad for those countries which see China as an
existing or potential export market and the latter is good news. In
the short term, exporters to China like Australia and New Zealand saw
their currencies weaken on the news.

Elsewhere, another commodity-reliant economy saw its currency weaken
for yet another day. Traders are wary of how well Canada will perform
if the US economy doesn't start growing more robustly and the fact
that the Canadian Dollar had become stronger than the US Dollar (the
other side of parity you might say) doesn't help exports.

That was about that for yesterday. This morning brings German producer
price indices, the European Central Bank's monthly bulletin, the
Confederation of British Industry industrial trends survey and housing
and manufacturing data from the US. Sterling is unlikely to be
significantly affected by the data because tomorrow's retail sales
numbers will be more influential. However, the EU and US releases will
be watched closely and these could prove to be the major driving
factors of the day.

I'll finish on a story that says caring service is alive and well. A
man travelling across America to see his terminally ill grandson
before his life support machine was switched off was held up in
security and would have missed the flight but for the fact that the
Southwest Airlines pilot, who had heard about the reason for his trip,
refused to depart until the man was located, cleared security and
boarded. The chap apparently arrived 12 minutes after the plane's
scheduled departure time breathless from running and carrying his
shoes which he took off for the security check. It may sound like the
opening sequence of some kind of black humour road trip movie but it
is, as far as I can tell true. Does it restore your faith in human
nature?

!! Quote !!
The good news is that, according to the Obama administration, the rich
will pay for everything. The bad news is that, according to the Obama
administration, you're rich.
*P J O'Rourke*
Source: Fxstreet.com