Overseas Comments Support USD Reserve Status

Overnight, the EURUSD came within a few pips of the 1.5000 psychological barrier but has recently retreated to 1.4975 - see chart.

The EURUSD remains well supported despite many positive comments made overnight concerning USD’s reserve status including those from Russia and France.

In fact, French government officials claimed that policy steps may have to be considered about weakening the Euro if the USD plight continues.

Elsewhere, the UK posted the largest Public-sector Borrowing figure since records began by registering a value of 14.8B this morning. Of further concern was the accompanying official statement advising the matters could worsen as this figure is predicted to rise to 12.4% of GDP during 2010.

There are market moving events this morning with the release of US Housing Starts and the US Producer Price Index at 8.30am EST. An increase in volatility should be expected.