Erratic day for Dollar following Geithner comments. Stock market recovers.

[RTFX-Trading]

What's new:

US: Obama set to tighten screws on Wall Street
US: House Panel approves $3.45 trillion FY10 budget
China: Seeks more economic stimulus
UK: Brown says world has reserves to beat crisis
Germany: IFO Business Climate 82.1

Today:

10h00 Euro-zone: M3 (FEB) exp 5.5% previous 5.9%
10h30 UK: Retail Sales (FEB) exp -0.4% previous 0.7%
13h30 United States: Personal Consumption Q4 exp-4.4% previous -4.3%
13h30 United States: Final US Q4 GDP exp. -6.6% previous -6.2%
15h00 FED: US Treasury Secretary Geithner testifies.

Overnight Ranges & Indices:

EURUSD: 1.3538 - 1.3618
USDCHF: 1.1182 - 1.1245
GBPUSD: 1.4537 - 1.4629
USDJPY: 97.44 - 97.93
DowJones: 7749 +1.2%
Nasdaq: 1528 +0.8%
Nikkei: 8636 +1.8%
Gold: $934
Oil: $53.34



Comment:

Asian markets were once again relatively quiet overnight, following an eventful day in New York. EURUSD traded 1.3419-1.3650 and USDJPY 98.35-96.93 yesterday afternoon following comments from Treasury Secretary Geithner. Speaking at the Council of Foreign Relations, he was asked for his opinion on the recent proposal by PBOC Governor Zhou to use the IMF's Special Drawing Rights (SDR) as the main global reserve currency. Geithner said he hadn't read Zhou's proposal but added "as I understand it, it's a proposal designed to increase the use of the IMF's Special Drawing Rights (SDR). I am actually quite open to that suggestion," referring to the increased use of the SDRs. The initial headlines sparked concerns of a shift in dollar policy and a sharp dollar sell-off followed. He then answered another question in which he was asked to clarify his answer on Zhou's proposal to which he affirmed that the dollar would
remain the dominant reserve currency.

After all the excitement from Secretary Geithner's comments we are expecting the dollar to remain supported as the current buzz about IMF and SDRs is having very little influence on the Fed's policymaking. Investors are waiting to see how banks fare up ahead, both in earnings and the implementation of the Treasury's new programs.

Ahead today, Q4 GDP and initial jobless claims data from the US are due. We keep experiencing erratic moves in the Forex market within a range consolidation: EURUSD key points are 1.3447 and 1.3665. A break of 1.3731 is bullish.

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