Despite dire employment figures on Friday the dollar did not quite die and in fact was buoyed up on good ISM numbers which, as i explained in my last post, as a leading indicator (as opposed to nfp which is lagging) it is a better guauge of what is happening in the US economy.
I accept that it may only be a short term reprieve for the dollar as this week we await interest rate decisions from both the ECB and BOE. However, i do not think we will see significant moves in the majors until the market has a clearer idea of where these rates are heading. In addition Paulson is due to speak later today and it will be interesting if he mentions anything from his meeting with Bush and Bernanke last Friday.
As a result the market today can be said to be in “neutral” and not very responsive so trading opportunities will be more difficult. I always try to use these quieter moments to catch up with any background reading and as it is January to write down some trading resolutions for 2008. One particular resolution this year is to study some of the more exotic currencies and in particular the Brazilian Real, which is being touted by Goldman Sachs, as the one to watch this year. Regular readers of my blogs will know my feelings about Goldman Sachs so i will be watching this currency very carefully!